Feeds

Spotify scores over £1m a month from subs

Sweet subscriber revenue music

The essential guide to IT transformation

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.

Secure remote control for conventional and virtual desktops

More from The Register

next story
6 Obvious Reasons Why Facebook Will Ban This Article (Thank God)
Clampdown on clickbait ... and El Reg is OK with this
No, thank you. I will not code for the Caliphate
Some assignments, even the Bongster decline must
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Banking apps: Handy, can grab all your money... and RIDDLED with coding flaws
Yep, that one place you'd hoped you wouldn't find 'em
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
Primetime precrime? Minority Report TV series 'being developed'
I have to know. I have to find out what happened to my life
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.