Spotify reaches 100m users, 30pc are paying

21 Jun 2016

Spotify has led the music-streaming charge of the 2010s, with its dominance reflected in new figures showing it has more than 100m active users – getting them to pay is still a challenge, however.

Spotify’s conversion rate from free subscribers to paying subscribers is around the 30pc mark, according to new figures released by the Swedish giant.

With more than 100m active users, that equates to around 30m paying subscribers. A few months ago, the company claimed its total users was around 95m, before a March announcement that 30m were paying.

That means little has changed since then. However, the trend is generally positive, with the company having around 10m paid subscribers in 2014, so that figure doubled last summer.

Spotify has become the European poster boy for tech companies, overtaking the mammoth Skype – owned by Microsoft – as the continent’s most highly-valued start-up (it’s worth €8.5bn, according to GP Bullhound).

What’s interesting is Spotify’s role in Apple’s music service. The latter’s iTunes completely revolutionised the music industry when it came along at the start of the 21st century.

As tangible sales were being gutted by illegal downloads, Apple’s easy-to-use digital purchasing tool helped drive the iPod, and then iPhone, to incredible heights.

However the lifespan of digital downloads was unpredictable and, in the past seven or eight years, streaming has started to encroach into the business.

So much so that Apple Music was released last year, with the company eyeing Spotify as its main challenger. Apple Music now has 15m paid subscribers, the company announced at its WWDC event recently, so there is little doubt that Spotify will be keeping a close eye on it.

The last funding round by Spotify saw €1bn raised earlier this year. It looks like, somewhat surprisingly, those numbers are based on actual performance. An interesting approach for investors in tech companies.

Spotify image via dennizn/Shutterstock

Gordon Hunt was a journalist with Silicon Republic