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.
These types of businesses
These types of businesses always seem to do very well and it is really a great thing to see. I hope that there will be more customers for Spotify in the future and that their business will continue to grow.
Spotify and other businesses like to go loco for a time but then another one comes out and then they go through the same cycle as well.