Exclusive: Spotify Crosses 11 Million Paying Subscribers…

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Spotify has now reached 11.2 million paying subscribers, according to research just shared by Statistic Brain.  In May of this year, Spotify crossed the all-important 10 million subscriber mark, but remains wildly unprofitable.


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32 Responses

  1. JSerr

    Spotify routinely claims they pay out 70% of revenue to rights holders, yet the numbers here suggest it’s under 30%. $576M rev in 2012 and $157M paid out annually (assuming this is 2012 as well). Any ideas on whats missing here?

    • Me

      This is the average for the entire 8 years that Spotify has been around, I believe. Spotify only entered the US in the middle of 2011. I’m assuming Spotify earned much less than $576M in revenue in the years before it was live in the US, considering it has grown from less than 3,000,000 paying subscribers to 11,000,000 in that time.

      There might be other factors, but this is the first observation that I had.

  2. Html

    $1,275,000,000 paid out to date / $157,000,000 annual payout on average = 8.12 years

  3. R.P.

    11 million and counting. I can recall the days that Paul thought this would never happen..

    • FarePlay

      Paul was talking US when Spotify had predicted they’d be there last year.

    • Paul Resnikoff

      I don’t ever remember making predictions like that.

      • TuneHunter

        Avg. global sub is @ $5 or less, after we add few advertising dollars on 34M of freeloaders we might not see $1B in revenues for 2014. Even If it happens, music industry will see just $700M from Spotify.

        Total idiot can see that Spotify activity will erase triple that amount from iTunes, Amazon and Radio.

        Subs and ads have been invented by BBC in 1927 and never been primary source of income for music.

        Music has to become merchandise again to have normal industry and fair compensation to creators.

  4. Dave

    Every time they add a million Eddy Cue updates his resume.

      • FarePlay

        Spotify and all these interactive streaming sites have an Achilles Heel. Windowing. People want to hear, what they want to hear, when they want to hear it. And no, paid subs will not go rogue.

        • GGG

          I pay for Spotify. I also bought Sam Smith’s album.

          • FarePlay

            Figures. you need new talking points. I know you and JW are massive collectors and VERY typical of the average Spotify user.

          • GGG

            I’m not some rare, unique snowflake either. Also, aren’t all Spotify users huge music nerds, since nobody else cares about the “museum” of Spotify or listens to that much music? And they only have 11M paying so not very many people at all.

            I think all you anti-streaming folks should hold a meeting and get your arguments straight. The average Spotify user probably spends more money on music than anyone.

          • FarePlay

            GGG you keep thinking everyone’s like you. And that’s what you base most of your statements on.

          • GGG

            In terms of people who consume music, more people are like me, a 28 year old who was young and grew up through the CD->digital->streaming shifts, than are like you, a god knows how old who has barely changed his consumption method in 60 years. You just don’t know this because, again, you are far more out of touch than I am.

      • jw

        300,000 subscribers isn’t going to get them an exclusive anything.

        Jimmy Iovine alone doesn’t necessarily mean anything. Until they have numbers that rival their competitors, doing an exclusive for Beats is like shooting yourself in the foot.

        • FarePlay

          JW, don’t you think it is fairly obvious why you are here defending Spotify constantly? Yeah, I know they’re a great service and when they scale they’ll save the music industry.

          Don’t like Beats, eh?

          • jw

            I don’t really know what you’re implying here.

            If someone like Beyonce or the Black Keys or whoever did an exclusive with Beats, they would be taking some up front cash in exchange for very, very little exposure, compared to other services. People aren’t going to commit to a subscription service for an exclusive, that’s just an outrageous concept. I imagine their fans would just be annoyed more than anything. Someone would record the line-out signal & the pirated version would be all over the internet in no time, & they’d ultimately lose money. That’s EXACTLY how that would play out.

            That said, I don’t have a problem with Beats at all. I personally feel like discovery and casual listening should be separate… when I get in my car, Sheryl Crow’s self-titled record is usually going to play, & I like that I don’t have to think about it. If I’m taking a longer trip, I might decide to put in something else, or maybe stream Spotify if I want to listen to something I don’t have in my car. So I don’t like opening up Beats & being confronted with a whole bunch of choices. I know for a fact that there’s awesome playlists on Beats, but the thought of opening it when I’m not looking for something specific just gives me anxiety. 9 times out of 10, I’m not in the mood to sift through all of those choices. Even still, I’ve been a paying subscriber since day 1, & I hope they do well.

            I’m just saying you’re overstating about Jimmy Iovine. I don’t know why you take everything so personal.

        • FarePlay

          The great thing about not having skin in the game, is that I don’t have skin in the game.

  5. Mr. Clueless

    Someone please explain to this naive person how they can possibly be “wildly unprofitable”? I just don’t understand where the money goes! Really, how much R&D and advertising could there possibly be? Even if they bought land and built a state of the art data center we’re still not talking about that kind of money. They don’t even manufacture a physical product for f@$cks sake! 11 million paid subscribers and still unprofitable?! How is this even possible!? How do you even raise venture capital for something that is projected to be unprofitable even with 11 million paid subscribers?! WHERE DO BILLIONS OF DOLLARS GO?!

    This is a serious question. Please help me understand.
    Where does the money go?

    Mr. Clueless

    • GGG

      1) They are a modern tech company so I’m sure their offices are super swagged out, mainly because…

      2) Modern tech companies have to recruit top level developers if they want to stay in competition. Those salaries can bloat pretty heavily. Of those 1000 employees, I’m sure a good chunk of them have salaries/bonuses well into 6 figures. You can be spending $100M on employees pretty quick.

  6. tippysdemise

    Excellent news, but Spotify should be charging more for the “offline” option, which is essentially a download. It needs another pay tier or a higher fee for premium. A lot of improvements still need to be made to user interface and the company’s general marketing and advertising, but once this service really starts to scale via more word-of-mouth subscriptions and once it becomes standard in vehicles, the money is going to start flowing.

    • jw

      Spotify does not need to charge more for the offline option because it’s not essentially a download. When you stop paying for Spotify, that disappears. That’s not ownership. A consumer shouldn’t have to pay more just so they can use the service, for instance, on the subway. That’s the kind of outdated thinking that could sink streaming before it reaches critical mass.

      There doesn’t need to be a higher tier or higher fee, unless full resolution audio is introduced (and even then it’s very much debatable).

      The success of the model is going to depend on 1) monetizing consumers who were previously not participating in the recorded music economy & 2) converting consumers who were participating into premium subscribers. You’re advocating squeezing Spotify’s best customers, which is a terrible idea. You have to move very casual music fans into the free tier, & more serious fans into the premium tier. And once someone is paying $120/yr for music, you basically give them whatever they want. Ultimately you want everyone paying $120/yr, not a whole bunch of people on the ad-supported model & then a small handful of people paying $200+ per year.

      • FarePlay

        “That’s the kind of outdated thinking that could sink streaming before it reaches critical mass.”

        If streaming’s so awesome, that will not happen. You’re still the “free market” guy, right?

      • Joel Price

        The biggest issue is that this pay model doesn’t pay the content generators anywhere near anything livable. People don’t go to as many shows because the artists have to charge more to make ends meet. Vivacious cycle. SoundScan is sitting on piles of money that it has not yet even passed through to labels more than a year after it changed hands. There are too many hands in the pot now. And the people controlling the current distribution model are strangling the content generators. One artist, a big one, was paid $39 for millions of of streams. It just does not generate a significant enough financial output to keep the recording business going.

  7. hippydog

    For an interesting comparison
    Canada has a population of around 35 million..

    The canadian tariff board reported Terrestrial Radio had a revenue of $1,622,658,421

    Socan Reported that the year end payout to artists was 55 million..

    not a “real” comparison can be made, but I thought it was interesting none-the-less..

    • TuneHunter

      Let’s abolish this $55M tomorrow and convert Canadian Radio to HALF A BILLION digital music store.
      Easy task if you evict mooches like Shazam or Google lyrics from the music house.
      Then Spotify can convert too and quadruple its Canadian revenues.