Sunday, July 29, 2012

Spotify's First Year

Spotify logo image from Bobby Owsinski's Music 3.0 blog
Spotify certainly still is the music subscription service that still gets the most press, so let's look at its first year in the United States. There are some numbers that the company should celebrate, and others that should shake it to its core.
  • First all, in the last year Spotify garnered more than 3 million US users, with about 20% of them being converted to paying customers. That's good.
  • Not everyone is in love with the service, since a lot of those paying subscribes are not re-subscribing, and not many of the others are willing to upgrade their service to paying. That's bad.
  • American users streamed 13 billion songs last year and shared almost 28 million. That's good.
  • 55% of those came through Facebook, 41% came from Spotify itself, 2.7% came through Twitter and the rest came from other sources. Spotify has a tight integration with Facebook, which isn't looking all that strong these days of post IPO madness. That's potentially bad.
  • Facebook users used the Spotify client almost 24 million hours last year. With 950 million users and over 500 million of those daily at about 45 minutes per, that's not all that much. Not so good.
  • For artists, Spotify pays $.0051 per free stream, .0078 per unlimited stream, and .0153 per premium stream. It takes 47 plays to equal a single $.99 sale from iTunes, according to Ditto Music. Not so good if you're a musician, although it's better to get paid something rather than nothing.
What we have to remember is that these are still the early days of subscription streaming music. Things are still shaking out, and will probably change significantly when some major players enter the market (hint: iTunes). Let's check back next year and see how much progress has been made, not only by Spotify, but the streaming service market in general.

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