It’s not surprising that Apple Music borrowed many features and concepts from Spotify. The streaming music service has become a growth juggernaut, particularly in terms of converting users to subscriptions. This morning, Spotify released some new numbers to the tune of 75 million active users and 20 million subscribers.
Just over one year ago, Spotify announced 40 million active users of which 10 million were subscribers. In January, that number had climbed 50% to 60 million active and 15 million subscribers. You could see a pattern emerging of a 25% subscription rate among active users. Six months later and growth has yielded 15 million more active users. However, one-third of the incremental users became subscribers. Total subscribers have grown to nearly 27% of all active users and doubled over 12 months.
Spotify CEO Daniel Ek has argued consistently that providing an ad-supported, free listening tier is essential for exposing listeners to the service and the best way to drive subscribers. The data is increasingly supporting his conclusions.
Most Users Still Choose Ad Supported Listening
Although there is a great deal of focus on subscriptions, it is worth noting that 73% of Spotify users are still opting for the ad-supported service. That is an impressive audience of 55 million consumers that advertisers can reach on Spotify today.
Strategy Analytics and others have estimated that only about 11% of Internet radio and streaming service listeners have chosen to subscribe and the rate is expected to persist through 2019. That means Spotify is skewing high among those listeners opting for subscriptions while still representing a large audience for advertisers.
No matter how you look at it, consumers are voting with their ears and increasingly choosing streaming for their audio. Many will pay directly for the services, while many more are opting for the traditional ad-supported model pioneered by broadcast radio.