Streaming music subscription service Spotify shared its latest user numbers today, announcing that it now has 15 million paid subscribers to its premium service and 60 million active users. Spotify’s paid user count of 15 million accounts is up from the 10 million paid subscribers it previously reported just over six months ago.
Since then, Apple has officially closed on its $3 billion deal to acquire Beats Electronics and Beats Music, which gave it access to its own on-demand music streaming subscription service. Before Apple’s Beats acquisition last year, the Spotify competitor was believed to have just over 110,000 paid subscribers of its own.
And while Apple has done relatively little to advertise Beats Music so far aside from an email blast and a prominent App Store position, recent reports have claimed an overhauled and potentially rebranded version of the Beats Music subscription streaming service could be included with a future version of iOS, bundling it with iPhones, iPads, and iPod touches, something Apple has already done with its Apple TV set-top box.
Additionally, Apple is reported to be working to make the cost of its overhauled on-demand music service more affordable at $5/month, cutting the fee in half from the current $10/month rate.
Spotify’s latest paid subscriber growth announcement should also be compared to Apple’s confirmation last year that iTunes experienced a decline in digital music sales that could be as high as 14%.
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I wonder if the 50% increase in just 6 months is due to the free premium accounts they are giving away when people upgrade the bandwidth with their ISP. That’s at least what’s happening here in The Netherlands.
Anyway, I haven’t even tried to see what Beats does; I’m already enjoying Spotify and only fire up iTunes when I sync/backup my iDevices.
The ISP deal is probably included. I’m sure the “three months for 99¢” introductory deal helped too.
Apple better is in serious trouble of losing to Spotify and Beats being a massive failure it Spotify’s numbers continue to grow. People put in a lot of time building those playlists and wont just start over from scratch if Beats isnt a drastically better value. Not to mention the Beats app needs to get a major redesign as it is not nearly as easy to navigate as Spotify.
Agreed. I’ve tried Beats but getting around isn’t nearly as seamless or intuitive as Spotify. I’m also not at all impressed with The Sentence. I’d rather not jump through a bunch of hoops just to hear songs from a genre. I prefer Spotify’s (and Rdio’s approach) to discovering music based on a song/artist rather than being forced to choose a type of music.
Justin Timberlake is pop but so are One Direction and I’d rather not hear a mix that combines those artists.
This might be one fight that Apple can’t win and making it cheaper won’t fix the issue. Apple should know better than anyone that cheaper doesn’t mean better.
If Apple wants to beat Spotify it’ll have to buy Spotify and just give up the Beats Music app.
I’m sure the the 3 months of premium for .99 cents promo helped bolster that number quite a bit. That was the reason I signed up.
This.
It reminds me of when Samsung gave away the first edition Galaxy Gear for free if you bought the Note 3 on t-mobile.
Any company can come up with ways to inflate numbers for a quarter. The biggest thing to look for going forward is customer retention.
The reason why is irrelevant. Only the end results matter. Users tend to stay where they start when it comes to services like these.
I was a huge fan of Spotify but found one crucial flaw. It’s radio feature just completely sucks. I could never get it on a roll and it needed constant maintenance. Pandora was good at it of course but lacks on demand obviously and you can tell they have a smaller catalog. I’ve been using Rdio and I think it’s the best of both worlds and does really well just letting it play on your personal FM station once you tweak it a bit. Forget about Beats. too ghetto for me.
Great, congrats.
How about improving Retina performance on Spotify?
It’s stupidly laggy and makes the MacBook Pro Retina look so underpowered compared to a cheap Windows laptop. I know that perfecting Retina performance is hard but please try.
The Radio feature has gone through at least one major overhaul over the last year. As for the growth its mainly happening in the US. Free trial accounts in the Netherlands (and elsewhere) does not count into this. Why? Because then Spotify would risk having to report lower growth numbers in six months.
I got in on the 3 months for $.99 deal but I definitely plan on keeping it beyond that. It was a great move to introduce people to their services.
Same, I plan to keep the service after the 3 months as well.
The real question is….. Is Spotify profitable? Last time they mentioned how much business they had, they had an increase in revenues, and an increase in losses. Are they profitable? If so, by how much?
What’s really important is whether Spotify is profitable or not. What difference does it make how many paid subscribers they have if they’re losing money? As you say, these pundits are always bragging about how much market share such and such company has but what’s so good about leading market share especially if the company isn’t profitable. I feel absolutely certain Apple has worked out a profitable streaming service because that’s how they run their business and they’ll certainly have the clientele who aren’t a bunch of cheapskates looking for free services. Apple will definitely make back the $3 billion they paid for Beats. I’ll bet AppleMusic will quickly pass Spotify and Pandora in paid subscribers and still there will be the self-proclaimed know-it-alls who will say that AppleMusic has failed because they didn’t reach 100 million paid subscribers fast enough.
Let me get this straight. In 6 months, Spotify gained 5 Million paid subscriptions. So it went up from 10 to 15 Million paid subscriptions. Is Spotify making a profit. Hmm. No one seems to want to talk about that. Why are so many people so consumed with Gross Revenues or Market Share and completely ignore Net Profits and Net Profit Margins? Without a profit, then company can’t continue to exist unless they get more cash infusion, which doesn’t always happen.
I would rather not hear about one of these so-called “HOBBY” companies until they reach profitability that gives me some thought that they have reached a valid business model. I would call Spotify a very expensive “hobby” company. Has anyone from Spotify said how many paid subscriptions they need to break even and to make a decent profit? They should have those metrics and guesstimates. Or is nobody asking?