Spotify: we've got 320,000 paying users

Streaming service Spotify reveals it has hundreds of thousands of paying customers - but says it's still earning from non-subscribers

Alex Watson PC Pro
17 Mar 2010

Music streaming service Spotify claims to have more than 300,000 paying customers - but insists that even users who don't pay are contributing to the bottom line.

Daniel Ek, the 26-year-old CEO of Spotify, took to the main stage to take part in a keynote debate on the final day of South by Southwest interactive here in Texas, at which he was widely expected to announce a US launch date for the service.

It soon became apparent that wasn’t on the cards, with Ek claiming that organising the rights needed for Spotify in the US was a fearsomely complex process involving more than 5,000 publishers, collecting societies and labels.

Refusing to be drawn on a date for a US launch, Ek instead used his keynote to demonstrate Spotify to the largely American crowd, reveal a few interesting facts and figures and to talk about how he sees the service developing.

People label it as free, but it’s not – people pay with their time, listening to targeted ads and we’re seeing good results with those

According to Ek, Spotify now has around seven million users across the six European countries it operates in, and it’s adding around 1,000 paid users a day. Currently, 320,000 people pay £10 a month for the service.

Yet, Ek insisted that the vast majority of users who don't subscribe shouldn't be regarded as freeloaders. "People label it as free, but it’s not – people pay with their time, listening to targeted ads and we’re seeing good results with those,” he said.

Next-gen Spotify

Ek claimed the company is putting a lot of effort into ‘next-gen’ Spotify, and that it’s opted not to go for the traditional web start-up approach of launching new features early and often.

The company sees a big opportunity in developing for mobile devices, not only in terms of giving people access to a huge number of tracks, but also offering the complex features and rich UI that many phones’ in-built media players don’t.

Ek said he wanted “music to be like water”, flowing easily from device to device. “The key with Spotify, is that it will enable your music library on all kind of devices, whether it’s a phone, set-top box or games console,” said Ek, appealing to the tech-savy crowd with the opinion that “if music, legally, could be on any device in a way that’s as simple as it is to get music from iTunes to the iPhone, then the music industry would be radically bigger.”

Ek said he first fell in love with digital music when using Napster. “You could see someone’s music collection, and you could see what other stuff that person was listening to. For me that was the ultimate thing, and we want to get close to that [with Spotify],” he said, going on to explain that the amount of music in Spotify – 10 million tracks – means discovery is a key issue that needs to be addressed.

“Search is only one solution,” he said. “What Spotify won’t be is another social network. We’ll piggyback on existing social networks to use their social graph and functions. You’ll be able to use that to discover new playlists and what people are listening to.”

Referencing Napster might be a good way to excite a geeky crowd but it’s something of a red rag to the music industry, and Ek sounded a more conciliatory note at various points in the discussion. He said complex and proprietary digital technology had hindered the cause of digital music and was at pains to say Spotify wasn’t “free music versus pay music.” According to Ek, “it’s about a mix of models. You’ll still buy the music you love, not as a dumb plastic disc, but perhaps as a special edition. We want to be a platform for artists to reach out to audience – and monetise that.”

Thirty per cent of Spotify playlists are whole albums, indicating that the album is a concept people are still interested in, according to the Spotify CEO.

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