Spotify Likely to Surge Past iTunes in Europe (Report)

Spotify has amassed more than one million active users in the U.K., one of the streaming service's biggest markets, in the past four months. 

With these numbers, Business Insider reports, Spotify is likely to surpass iTunes as the largest market for digital music listening.

"Given that download sales are declining and Spotify is growing rapidly, particularly in the U.K., it is only a matter of time before Spotify is bigger than iTunes across Europe as a whole," Kevin Brown, Spotify's head of label relations in Europe, told Music Week.

iTunes stands to lose consumers as more people pay for subscription services instead of paying for track downloads, especially after the U.K. closed the tax loophole that kept digital song prices at £0.99 ($1.63). 

Brown didn't disclose numbers but said that a "significant" proportion of those new users were subscribers, an increase that can be attributed to Spotify's bundling deal with Vodafone (following a partnership with Virgin Media). In March of 2013, Spotify revealed that of its 24 million U.K. users, six million were subscribers; its 2012 financial statement reported that the company's U.K. subsidiary accounted for a quarter (25.5%) of its worldwide earnings, almost a quarter of which (21%) was supplied by subscribers. 

Despite the competition with iTunes, Brown sees YouTube as Spotify's primary rival. "We’re still put in the same bucket as iTunes by some labels, whose music then appears on YouTube," Brown told Music Week, citing exclusive iTunes album releases like Beyonce's surprise self-titled album drop. "That drives me nuts."

As for iTunes, it's rising to the challenge: last year the company announced its intentions to launch its own streaming service, iTunes Radio, in the U.K., Canada, and unspecified Nordic countries, in effect beating competitor Pandora to those markets. To deal with declining downloads in the U.S., Apple has been considering launching a Spotify rival and Android app.


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