Feeds

Spotify scores over £1m a month from subs

Sweet subscriber revenue music

New hybrid storage solutions

Music streaming pioneer Spotify earns more than £1m a month from its premium subscribers, OUT-LAW.COM can reveal. Earnings could be as high as £72m a year. The figure is derived from statements made by Spotify executives.

Spotify has been reluctant to reveal how many of its users have upgraded to its premium version. Costing £9.99 a month this allows users to hear music without adverts being played every few songs, and allows them to use other applications such as the Spotify iPhone application.

OUT-LAW.COM can reveal that that figure is between 100,000 and 600,000 people in the six countries in which the service has launched. That translates into monthly earnings of £1m to £6m per month, and annual earnings of between £12m and £72m.

Spotify's director of content Niklas Ivarsson revealed last night that the number of users who have upgraded is "in six figures". Ivarsson was speaking at an event organised by the Scottish Society for Computers and Law (SCCL) in Edinburgh.

Company chief executive Daniel Ek told an event for entrepreneurs in London two weeks ago that the number of subscribers was fewer than 10 per cent of the total number of users. "It’s not double digits yet, but we think we can get there," he said, according to TechCrunch.

Spotify confirmed to OUT-LAW.COM that it has six million users. That means that the number of paying users is between 100,000 and 600,000, spread across the six countries in which it has launched, which are Sweden, Finland, Norway, France, Spain and the UK.

Most users register with the company, download its software and listen to songs for free as they are streamed over the internet. An advert is played every few tracks.

Spotify's business model is an issue of intense interest to the internet and music business worlds. It is the only company to have managed to convince all the major record labels to allow their music to be streamed for free.

Its costs and earnings have been, till now, secret, though many have made estimates. Industry observers told The Times newspaper last month that in July of this year the company streamed 700m songs at a cost of around £3m. The paper estimated that advertising income is running at about £60,000 a month.

[The Register was the world's first to disclose Spotify's subscriber and revenue in July. Advertising revenue was 14p per subscriber in the UK. - Ed.]

At the SCCL event, Ivarsson also revealed the surprisingly small outlay the company has made on promotion of its services. He said that the company had spent just €2,000 on marketing in the UK. It is believed to have spent just €30,000 on marketing in all of Europe.

"We don't comment on financial details," a Spotify spokesman told OUT-LAW.COM.

Copyright © 2009, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Security for virtualized datacentres

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.