Spotify just announced some big-name partnerships, and on the roster are Coca Cola, AT&T and McDonalds, Intel and Reebok. The Coca-Cola deal is built to help Spotify go global, and more information is expected later this afternoon. Spotify also confirmed plans to embed "brand apps" in its desktop application, which sound like they would give their brand partners Intel, Reebok and others better visibility. All this fresh from AdAge digital conference where Spotify CEO Daniel Ek's been speaking this morning.
What is the history of Spotify?
Before we found that spotify just hit 3 million paying subscribers, the Financial Times reports. That may sound like an impressive milestone for the popular on-demand music service, but how impressive is it really?
Only about 64 days have elapsed since Spotify announced it reached 2.5 million subscribers in November. That means 500,000 users have signed up to pay for the service in that time--or, from another perspective, a back-of-the-envelope calculation reveals that 7,000 to 8,000 users are subscribing to Spotify each day, on average. And remember: These are global statistics from a service that has been touted by the record labels and media, and boasts the powerful backing of Facebook's Open Graph.
That may not sound like a lot, but compared with other digital subscription services, Spotify is certainly growing at a fast clip. Netflix, for example, added 610,000 users this past quarter, while Sirius XM added 540,000 in Q4, meaning Spotify is gaining subscribers at a faster rate. (Interestingly enough, Netflix grew from 2.5 million members to 3 million members in about the same time frame back in the early aughts.)
Still, to reach Netflix's and Sirius XM's 20-plus million subscriber counts, it would take Spotify roughly 7 to 9 years at this rate, though user ship figures are likely to increase faster the more popular the service becomes.
Spotify's growth gives weight to evangelists of Facebook's Open Graph, which enables third parties to create apps on top of the social network. Earlier this week, Facebook COO Sheryl Sandberg highlighted Spotify's success, saying that Facebook has helped add more than 7 million users of the service.
It also helps silence critics. Only today, Rhapsody president Jon Irwin questioned whether Facebook was helping to add freeloaders or paying subscribers. "I think the success that Spotify's had on Facebook--well, Spotify has a very tight relationship with Facebook in terms of the development of their implementation," he said. "And it's seen significant growth in its number of users--and I emphasize number of users on the service, who are not necessarily subscribers...But the question remains whether it's effective in converting people to being paying subscribers versus, say, music transients who want to just listen to music for free and move onto the next allotment of free music they can get."
Spotify gave some defense of its freemium-to-premium conversion rate today, showing how
Only about 64 days have elapsed since Spotify announced it reached 2.5 million subscribers in November. That means 500,000 users have signed up to pay for the service in that time--or, from another perspective, a back-of-the-envelope calculation reveals that 7,000 to 8,000 users are subscribing to Spotify each day, on average. And remember: These are global statistics from a service that has been touted by the record labels and media, and boasts the powerful backing of Facebook's Open Graph.
That may not sound like a lot, but compared with other digital subscription services, Spotify is certainly growing at a fast clip. Netflix, for example, added 610,000 users this past quarter, while Sirius XM added 540,000 in Q4, meaning Spotify is gaining subscribers at a faster rate. (Interestingly enough, Netflix grew from 2.5 million members to 3 million members in about the same time frame back in the early aughts.)
Still, to reach Netflix's and Sirius XM's 20-plus million subscriber counts, it would take Spotify roughly 7 to 9 years at this rate, though user ship figures are likely to increase faster the more popular the service becomes.
Spotify's growth gives weight to evangelists of Facebook's Open Graph, which enables third parties to create apps on top of the social network. Earlier this week, Facebook COO Sheryl Sandberg highlighted Spotify's success, saying that Facebook has helped add more than 7 million users of the service.
It also helps silence critics. Only today, Rhapsody president Jon Irwin questioned whether Facebook was helping to add freeloaders or paying subscribers. "I think the success that Spotify's had on Facebook--well, Spotify has a very tight relationship with Facebook in terms of the development of their implementation," he said. "And it's seen significant growth in its number of users--and I emphasize number of users on the service, who are not necessarily subscribers...But the question remains whether it's effective in converting people to being paying subscribers versus, say, music transients who want to just listen to music for free and move onto the next allotment of free music they can get."
Spotify gave some defense of its freemium-to-premium conversion rate today, showing how
20% of its active users are now paying subscribers, compared with just 15% last year.
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