Spotify CEO & co-founder Daniel Ek is expected to take to the stage at SXSW later on toda to announce the service has registered its six-millionth paying subscriber.
According to tech site CNET, the music streaming service has already taken onboard number six-million – an impressive feat when users have access to a majority of the service’s features for free.
The service has three simple tiered bands – free, £5 or £10 (the equivalent costings appear in other regions too), and many music-heads agree that it’s thanks to the likes of Spotify that the music industry is no longer dying on its feet. A high percentage of users go on to actually purchase tracks that they have shared on Spotify and use the resource as a ‘trial’ medium.
Not only is the 6-million figure impressive, it’s also encouraging to see how fast Spotify’s user-growth is. With 1 million sign-ups in the past three months alone, it’s an exciting time to be working for the service. One insider paints the picture that the organisation is well on its way to achieving the coveted $1bn revenue figure by the end of this year (revenue appears from paid-subs as well as brand advertising).
However, it’s not all that rosy. Remember, this is the music industry – according to CNET calculations, almost 75% of all revenue generated gets paid out in music royalties. That leaves just 25% to cover everything else – R&D, resource, servers, advertising etc.
Still, this is great news for a company that many thought would not have a future! Great work Spotify…. now, how can I buy shares?
