Spotify has been reluctant to reveal how many of its users have
upgraded to its premium version. Costing £9.99 a month this allows
users to hear music without adverts being played every few songs,
and allows them to use other applications such as the Spotify
iPhone application.
OUT-LAW.COM can reveal that that figure is between 100,000 and
600,000 people in the six countries in which the service has
launched. That translates into monthly earnings of £1m to £6m per
month, and annual earnings of between £12m and £72m.
Spotify's director of content Niklas Ivarsson revealed last
night that the number of users who have upgraded is "in six
figures". Ivarsson was speaking at an event organised by the
Scottish Society for Computers and Law (SCCL) in Edinburgh.
Company chief executive Daniel Ek told an event for
entrepreneurs in London two weeks ago that the number of
subscribers was fewer than 10% of the total number of users. "It’s
not double digits yet, but we think we can get there," he said,
according to TechCrunch.
Spotify confirmed to OUT-LAW.COM that it has six million users.
That means that the number of paying users is between 100,000 and
600,000, spread across the six countries in which it has launched,
which are Sweden, Finland, Norway, France, Spain and the UK.
Most users register with the company, download its software and
listen to songs for free as they are streamed over the internet. An
advert is played every few tracks.
Spotify's business model is an issue of intense interest to the
internet and music business worlds. It is the only company to have
managed to convince all the major record labels to allow their
music to be streamed for free.
Its costs and income have been a subject of great
interest. Industry observers told The Times newspaper last
month that in July of this year the company streamed 700m songs at
a cost of around £3m. Technology news site The
Register reported seeing evidence that its advertising revenue
for May 2009 was £82,000.
At the SCCL event, Ivarsson also revealed the surprisingly small
outlay the company has made on promotion of its services. He said
that the company had spent just €2,000 on marketing in the UK. It
is believed to have spent just €30,000 on marketing in all of
Europe.
"We don't comment on financial details," a Spotify spokesman
told OUT-LAW.COM.
Editor's note, 09/10/2009: The original
version of this story cited an estimate by The Times of
Spotify's ad income (£60,000 for the month of July). Our
friends at The Register say that they saw
Spotify's actual ad income for May and published that figure
in June (see the link above).
Event: Do targeted ads breach
privacy? Avoid the legal pitfalls by attending OUT-LAW.COM's
free seminar on Behavioural
Advertising and the Law. At a city near you in October.
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