Spotify's Monthly Revenues Around 3 Million Euros
By Antti Vilpponen
TechCrunch ran a story on Spotify a couple of days ago, where Daniel Ek had commented on some very interesting issues. Daniel Ek, Spotify CEO, spoke at SXSW and told in his keynote that, Spotify as a service consumes more bandwidth than the whole of Sweden (on certain days that is). Those wondering why Spotify is built in a P2P manner now fully understand the need for such a solution. Ek also commented that it's a million dollar question why Apple remains to deliver all its digital downloads from a "single source" generating huge amounts of traffic that also need to be paid for.
On another note, Daniel Ek also commented on another interesting figure regarding Spotify's subscriber base. He mentioned that Spotify now has some 7 million subscribers to the service of whom approximately 320 000 are paid subscribers. By the average price of the service (around 10€), Spotify is now generating revenues somewhere around the three million mark per month. This however does not mean the company is profitable as it is very much unknown how the revenues are paid onward to the copyright owners, ie. the record labels.
With about 320 000 paid subscribers from 7 million total user base, Spotify's conversion to paid users is a nice 4,57%. This is a very interesting figure they can use in the negotiations with the US counterparts of the copyright owners as they are planning to open the service there. It seems that Spotify is well on its way to success, nevertheless the much debated payment rates to artists.
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It's strange that the conversion is only 4,57 if you think how annoying are the ads that tells the non-paid users to purchase the subscription!!!
However I purchased the premium subscription and I'm quite happy now.
Spotify is a great service and I really hope it will succeed in the US.
I think most people are happy/ok with the ads -- my suspicion is that the mobile version (that is available only to paying subscribers) is driving force for paid subscriptions. At least for me, it would be the reason why I'd pay for the service -- excellent freemium model, if you think about it: you create your playlists and eventually your entire music collection into Spotify, but need to pay to unlock that collection to be used away from your desk.
I've tested the the mobile version on iPod Touch and it works great (though syncing huge playlists for offline use could be a little faster).
But I don't really like playlists, I never use them even with other music players (like Winamp). I want to browse/listen to the songs by artists/albums, not by playlists or searches.
It would be nice if I could "favourite" artists and I would see them allways on the left sidebar. Now it only shows the latests searches and the playlists.
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