On-demand music streaming service Spotify announced yesterday that it now has more than 3 million paying users. That figure reportedly represents more than 20% of its total active userbase.
Spotify users must pay a monthly subscription -- ranging from $5-10 -- to use the service on mobile devices, to remove advertisements and for other benefits (see here for more).
Spotify reached 2.5 million paying subscribers in November. And in March 2011, it said 15% of its active userbase paid a monthly subscription.
“We have achieved some pretty great results in terms of the ratio of paid users,” said Ken Parks, Spotify’s chief content officer and U.S. managing director. "We have an enormous internal effort to drive conversion and engagement with the service."
The Financial Times writes that a recent change by Spotify may have encouraged more free users to subscribe -- or to just leave. Unlimited streaming for free users ended in early January, six months after Spotify launched in the U.S. (more coverage here).
Spotify also recently introduced new "apps" within the service, many of which offer radio-like features for users (RAIN coverage here).
You can find more coverage from the Financial Times here.
Rhapsody will expand into Europe by acquiring Napster International, which operates in the UK and Germany, the company announced recently.
It's great when users are willing to divulge important demographic information when buying products, or to gain access to entertainment (such as online radio channels). Info like gender, age/year-of-birth, and geographical location not only gives merchants and publishers a better idea of who their customers are, but helps build a valuable database that can be monetized by delivering targeted marketing to specific demo groups, right?
