News - 21/05/2014

Spotify maintains 25% conversion rate with 10m premium users out of a 40m total

Spotify maintains 25% conversion rate with 10m premium users out of a 40m total


Spotify revealed its latest figures today after over 14 months of silence. The company now has 40 million monthly active users, 30m enjoying the company’s free ad-supported offering and 10 million paying subscribers. In March 2013 the company had 6m premium subscribers out of a 24 million users total, so the ratio between free and paid remains the same at 25%.

This consolidates the opinion that although offering a free version of the service is expensive and a headache given the advertising revenue required to cover that cost it is worthwhile as a way to draw people in. 

Beats Music, one of Spotify’s main competitors in the US - has chosen not to have a free component and the first user numbers that have been making the rounds on the last few months since the company’s launch in January show that it could have been a big issue in drawing mainstream customers to the product.

As part of the press release accompanying the announcement, Spotify revealed that Eminem is the most streamed artist of all time and that “Wake me up” by Avicii is the most streamed song of all time.

Daniel Ek, founder and CEO of the company stated: “We’ve had an amazing year, growing from 20 markets to 56 as people from around the world embrace streaming music. 10 million subscribers is an important milestone for both Spotify and the entire music industry,”...“We’re widening our lead in the digital music space and will continue to focus on getting everyone in the world to listen to more music.”

Of course the company is not just releasing these numbers to feed the curiosity of the press, Spotify has been eyeing a potential IPO in the Autumn: the announcement could provide the company with the momentum it needs to convince institutional investors to jump on board on the public offering plans.

(Andrea Leonelli)

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