Spotify’s Subscriber Growth Accelerates, Appears Fueled By Mobile Listeners
How did Spotify get its most recent 2.5 million subscribers? Let's take a look.
How did Spotify get its most recent 2.5 million subscribers? Free mobile listening, for the most part.
The leading subscription music streaming service the 12.5-million mark. The 15-million mark was reached roughly two months later.
Another way to look at subscription growth is months per millions of subscribers. At the 4, 10, 12.5 and 15 million mile markers, the number of months needed for each million subscribers has been 11.6, 3.7, 2.3 and 0.8. At the current rate, Spotify is adding about 1.2 million subscribers every month. This deserves a couple asterisks, however. The current rate could be influenced by the holiday season — gift cards, smartphone purchases — and may not be sustainable. (In retail and elsewhere, certain periods are exceptional and require a series of numbers to be seasonally adjusted.) The limited-time sale of three months for 99 cents (normally $9.99 per month) undoubtedly goosed subscriptions — another unsustainable trend. Or, although this is unlikely, some of the most recent 2.5 million subscribers are attributable to the Taylor Swift vs. Spotify controversy and the increased awareness it brought the company. In any case, it’s clear the rate at which Spotify is adding subscribers has increased over time.
There’s more than mobile devices at play here. One cannot overlook how subscription services have increased their value through a number of tactics. Spotify tries over time to convert free listeners by explaining the advantages of subscribing: mobile caching, on-demand mobile listening and use with a range of in-home stereo equipment, among others. With apps for smartphones and tablets, plus the ability to play on Sonos and other in-home audio systems, subscribers are able to enjoy a level of ubiquity that didn’t exist in the past. In other words, the level of value provided to subscribers increases over time, which has probably played an important role in Spotify’s accelerated subscriber growth.
The politics of free listening is another matter. Spotify’s business model — use free listening to get paid listening — has been widely criticized. Many artists and rights holders believe consumers should pay for on-demand listening and say unlimited free listening results in royalties that are too low to sustain their creative efforts. In fact, some subscription services — Beats Music is one — rule out free listening altogether.
But the numbers don’t lie. Spotify has the most subscribers of any music subscription service and a quickening pace of subscriber acquisition. If the goal is to get people to pay for streaming, free mobile listening appear to be an effective tactic.
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