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-- The Register has reported Spotify is doing a better job converting its free users to paid, premium subscribers. The service now has 116,000 premium users, according to the report, an increase from 34,000 in May. That comes out to roughly a 4% conversion rate (as in converting free users to paying customers). That's an improvement on the previous conversion rate reported by the Register, although the previous rate was a very low starting point. Almost half of the paying users are mobile subscribers - the Spotify iPhone and Android apps may have helped boost the numbers. The report is a bit unclear on the time frame, however, as it does not attach a date on the 116,000 figure for premium users.

A 4% conversion rate is well below the "close to 10%" that is bandied about in the press. It's also a number that implies the company continues to experience a challenging cost basis. A service like Spotify depends on both paying customers and ad revenue generated on free users. With advertising revenue what it is, paying customers end up subsidizing the free users. As Spotify increases its share of paying customers, it inches closer to its ultimate yet distant goal: profitability. These are the early days of Spotify and its type of subscription model, however, and the company's forward progress should be duly noted. (The Register)

-- The IFPI responded to a survey by think tank Demos that says file sharers are avid music buyers. "These findings do not prove that illegal file-sharing boosts music sales," said the organization in a press release. "They only reflect that there is an overlap between those people who download music illegally and those who purchase music. This is not an original finding and it is consistent with the typical profile of many music fans who today acquire music from different sources, some legitimate and some not." Which is all true. People tend to get their music from a variety of sources. And the Demos survey did not reveal that file-sharing results in a net increase in music purchases - not even academic research paints a clear picture on that behavior. The thing to think about here is what anti-piracy measures - like Internet account suspension - will do to the legal purchases of some people who also download illegally. (Press release)

-- Sirius XM released its Q3 2009 earnings on Thursday. Other than a big hit due to the closing of a credit agreement, the numbers look pretty good. The company netted over 100,000 subscribers, revenue rose 3% and lost $182 million (four cents per share). In an interview with CNBC, Sirius XM CEO Mel Karmanzin talked about improvements in cash flow from operations, net income and churn in the last quarter. The number of subscribers gained in Q3 was the most since the merger. The company's churn has improved and is now 2%, Karmanzin said. And he was bullish on the company's prospects for 2010 as the economy - and the auto industry - recovers. "Pay service works, and just like it works in television it will work in radio," said Karmazin. "So yes, we will have competition, our content is going to be and will continue to be the best there." (Press release and CNBC)

-- The Guardian noted Journey's "Don't Stop Believin'" is the 17th most popular song in England. Indeed. It's popular in the U.S. as well. Turns out the Internet is quite an echo chamber. "Two things explain the peculiar contemporary appeal of this song. Firstly, there's an obvious, factual explanation - its presence across mass-market TV shows, which join people together, whatever their age. Songs gaining second lives on the small screen isn't a new thing...but in 2009, the internet intensifies this experience." The second reason? It's OK to like power ballads these days. (The Guardian)

-- Earlier this week, Qtrax announced a partnership with Chinese search giant Baidu that will direct some users searching for music to Qtrax. According to a Baidu representative, however, the deal does not mean Baidu will point users to Qtrax's music service. The representative had this to say in an email to IDG News Service: "The partnership with Qtrax regards text-based information, such as singer backgrounds; it has nothing to do with the music itself." Updated:IDG corrected its earlier article. A publicist for Qtrax told Billboard, “Baidu will direct traffic to Qtrax from two specific portals, the Entertainment Portal and the Qian Qian Music Online sites, when Qtrax has the queried artist or song in its catalogue.” In its corrected article, IDG noted that Baidu will not remove links to MP3s in its search results even though it may point users to Qtrax. (IDG, via Hypebot)

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