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Spotify Music Streaming

Spotify bags 15m subscribers after growth boost

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By Seb Joseph, News editor

January 13, 2015 | 3 min read

Spotify’s efforts to demonstrate it can turn users of its free music streaming service to pay for it were handed a fillip after it revealed it had recruited 15 million subscribers and 60 million active users at the end of 2014.

The company declined to share more details such as geographical breakdown in a blog post yesterday evening (13 January) but the headline stats highlight significant gains in the latter half of the year. In May, Spotify said paying subscribers accounted for 10 million out of 40 million overall - a boost of 50 per cent in just seven months.

The proportion of paying subscribers has stayed at a steady 25 per cent over the last year despite the swell in user numbers. Much of the growth has reportedly come from mobile with 42 per cent on phones and 10 per cent on tablets, while 45 per cent on desktops and 3 per cent its web player.

Spotify’s mobile explosion validates its decision to offer users free access to its streaming catalogue on IOS and Android smartphones and tablets late 2013 for the first time.

The subscriber growth is likely to fuel rumours that the streaming service is poised for an IPO later this year. Like rival services, such as Pandora and Apple’s Beats Music, Spotify is under pressure to become a part of the music economy’s mainstream amid falling music sales and piracy.

While a dominant player has yet to emerge, the opportunities to turn music streaming into a profit are untapped as evidenced by Google’s decision to launch a paid-for YouTube music service.

For companies to prosper beyond balancing the natural tensions between paid and freemium models, they will need to settle the debate over how much artists benefit from them financially. Should they fail, the likes of Spotify and Pandora could see more artists withdraw their music, similar to Taylor Swift’s decision to remove her entire catalogue from the former.

Spotify Music Streaming

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