It’s particularly notable that the streamer, which said it had 75 million users in June, expects steady growth for 2015’s second half considering Apple Music’s early success since its June launch. In just three months, the tech giant’s music streaming arm garnered 15 million free trialists. (We’re still waiting to find out how many begin paying since their three month free trial ended on September 30.)
100 million seems like a huge number, but there’s a caveat: most of its users are freeloaders. Unlike Apple Music (or, in the video streaming realm, Netflix), Spotify has a free, ad-supported subscription tier. And as of June, 55 million — nearly three-quarters — of its current user base are on this plan. If the trend continues (and Spotify’s projections hold), expect the streamer to have about 26 million paid subscribers by the end of the year.
And while the music streaming sector is becoming a huge chunk of recorded music revenues, the lion’s share of streaming revenue comes from paid subscriptions. Record labels have even pressured streamers to limit the amount of free music on the services due to its low payouts. (We’re still waiting for the fallout from that, but various labels including Universal have threatened to remove their catalog from the service unless something changes.)
Regardless of the company is doing financially, Spotify is still the leader in the on-demand music streaming market in the US (and Europe) — and, if projections hold, it likely will continue to be for the foreseeable future. Maybe, at some point, the service will even become profitable? We’ll keep you updated.
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