News - 12/01/2015

Spotify reveals that over half of its streaming activity is on portable devices

Spotify reveals that over half of its streaming activity is on portable devices

Spotify, at a presentation for brand advertisers at CES 2014, revealed that 52% of the service’s music is now consumed on mobile phones and tablets. 

 

TechCrunch reports that when it comes to where Spotify users stream music, mobile phones have a 42% share, tablets 10%, the desktop player 45% and the web player 2%. 

 

Spotify’s highly engaged audience - its mobile & desktop users streaming on average 150 minutes of music per day - represents a big opportunity for advertisers since over 38 million users of the service are still on the “free” tier. 

 

The company also has a good amount of demographic information on those users since over half choose to connect their account with Facebook.

 

Spotify’s earnings have shown that the vast majority of its income comes from subscriptions and that ad-supported tier is still essentially subsidised by those subscriptions since ad revenue is still not high enough to cover licensing costs. This is not an insurmountable problem in theory - Pandora for example has made great strides in monetising mobile users - but additional advertising could be a double-edge sword for the company. 

  Adding more adverts could annoy users enough to want to upgrade - one of the criticisms made by rights holders is that the “free” Spotify experience is too good. 

 

On the other hand, one could argue that the reason why the company has such a good conversion to premium - around 20% - is exactly because the “free” experience is so good that at some point the service becomes indispensable and the £/$/€ 10 per month not such a big burden. 

 

(Andrea Leonelli)

 

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