Today, Spotify CEO Daniel Ek officially announced that the streaming service has hit the 30 million paying subscribers.
The announcement offers critical validation for Spotify, and a major counterargument against a torrent of artist complaints and frustrations. A number of high-profile artists continue to exclude their music from the service, while oftentimes making songs exclusive to other streaming platforms.
Those boycotts are often rooted in compensation disputes, though Spotify contends that free access is a critical path towards achieving paid scale. Now, the question is whether this Swedish juggernaut can start to elevate its compensation levels with a healthier, higher-paying userbase.
Spotify remains ahead of the pack, though there’s a lot of heat in the rearview mirror. The platform’s biggest competitor, Apple Music, has 11 million paid subscribers, according to a mid-February announcement. That is roughly one-third Spotify’s paid users, though Apple Music is less than a year old.
The latest milestone reflects a prolonged surge in paid Spotify subscribers, despite heavy-and-increasing competition. In 2014, the streaming platform announced 10 million subscribers, which was followed by an announcement in 2015 of 20 million subscribers. Now, in early 2016, the coveted 30 million subscriber-mark has been reached. All of that puts 50 million in sight, with Spotify and Apple Music collectively closing in on the 45 million threshold.
That sharp rise could help to thin the competitive ranks, with smaller services like Rhapsody and Tidal struggling in the single-digit millions of paid subscribers.
Separately, a number of heavyweights are preparing paid entrances. SoundCloud is reportedly working on its own subscription play, a serious heavyweight that remains entirely free-access that moment. YouTube is also in the early stages of launching Red, a paid platform whose music offerings are currently unimpressive.
Now give the same graph, but with subscriber revenue instead of subscriber numbers. I don’t know what the result would be, because Spotify aren’t releasing that info (‘transparency’, ho ho), but we can be sure it won’t look the same. Spotify have boosted subscriber numbers by the brilliant wheeze of reducing their price by over 90% (from $10 per month to $1 for 3 months) as an ‘introductory offer’. Which may be fine if the ‘introductory’ subscribers are genuine (and not just using false names switching to the lower rate) and if they go on to pay the full rate eventually. If not, not.
Spotify subsrcriber numbers exclude anyone on a trial or intro offer.
And what if somebody has a deal with a mobile operator, Spotify premium included, but hasn’t streamed one song. Is this person included?
That’s good news if it is true, so what is your source? I haven’t seen it stated anywhere else, including Spotify’s own announcements, such as their statement of 10 June 1015 reporting 20 million subscribers. If a company fails to mention some fact which would be:
a) important
b) relevant
and
c) in their own interest to mention
I tend to assume that they don’t mention it because it isn’t true.
I work for a small-ish label and was told a few months (6 or 8?) back that Spotify would only report fully paid subs, not trials anymore at that point.
But, perhaps a proper journalist (ahem, Paul) could reach out and ask if readers think it’s important enough?
Highly doubt that
The inability to answer a simple question exposes a logical fallacy that undermines the entire premise of this headline.
What percentage of these users would have purchased a full subscription if the “freemium” version didn’t exist? I don’t think that question can be factually answered because the causation described doesn’t actually exist.
Kudos on the effective clickbait, though!
This is good news, right?
Not necessarily. There are legitimate questions about how sustainable Spotify’s monetization strategy truly is.
If revenue per user is falling as the number of total users rise, growth of the user base could easily represent a dilution of value to artists, labels, and songwriters.
Divorcing the cost of the service from the actual consumption of the users (as in how many songs did they play and who owns those songs/recordings they listened to) creates these types of risks and distortions.