updated 04:40 pm EST, Thu January 26, 2012
Spotify gets momentum at 3m listeners
Spotify has already reached three million paying subscribers, the company's US managing director Ken Parks gave out in a discussion Thursday [free reg. required]. The benchmark number given to the FT was triple the million from a year ago and saw it growing much faster than before, having reached two million in September and 2.5 million in November. The three million now represented a larger 20 percent portion of the base and didn't include those who were just part of free trials.
The increase to Parks was a sign of "pretty great results" in working to convert listeners from the free, ad-sponsored service to either the $5 desktop-only version or $10 for a mobile-friendly Premium plan. He credited it in part to the month-long trials as well as an initially loose approach for listeners on the free service, who get ads but unlimited plays for their first six months and only then face the maximum play counts and other caps on the free service.
Adding more paid users both helps allay label fears that Spotify might be abusing their licensing deals as well as a criticism of poor revenue that has led some distributors and labels to pull out over low revenue. While the income per track is still smaller than at a pay-to-own store like iTunes, Spotify's subscription service provides considerably more to labels and artists than the ad-only model and theoretically makes more sense when considering revenue from repeat plays.
Spotify is often considered the other major force in European music next to iTunes and is already considered successful among the subscription music services in the US, where it only just arrived last year. Its American presence led rivals such as MOG and Rdio to implement free models where before they required a subscription to work at all.