It’s safe to say Spotify is on something of a hot streak. The company announced it had reached 2.5 million subscribers in late November. It had 1.5 million subscribers in June, 1 million in March and 500,000 in July 2010. The last publicly available figure for total active users is 10 million. Parks did not give an update on that figure when he offered the new subscriber count.
With growth like that, it would be hard to argue Spotify – and streaming services in general – have been hurt by a few holdouts such as recent albums by Coldplay (released in October) and the Black Keys (released in December). If label and artist discontent have dissuaded some consumers from becoming subscribers, the impact is lost amidst otherwise strong growth. Spotify has added 500,000 subscribers since November, a period of heavy media coverage of those and other holdouts from streaming services.
Spotify’s integration with Facebook is likely to be a major factor in its current growth trajectory. The service saw a spike in users after Facebook’s f8 conference in September, and it stands to reason that Spotify is getting great benefits out of that relationship. At Thursday’s event, Parks detailed a link between Facebook sharing and Spotify adoption. “Users who are exposing their listening on Facebook are three times as likely to become paid subscribers,” he said, according to mocoNews.
How much subscription revenue is Spotify pulling in? The company has not revealed the percentage of subscribers to either the mobile ($10/ €10 per month) or PC-only ($10/ €10 per month) services. But if one assumes, just for this example, that subscriptions are split 50/50 between the two levels and five out of six subscriptions are in Europe (where Spotify has operated for years), it works out to about $28 million of subscription revenue per month and $340 million per 12 months. Again, that’s a quick estimate to show how much revenue might be generated from 3 million subscribers. One more thing: that estimate leaves out advertising revenue from the 7 million (or so) active users who are not paying for a subscription.