Spotify solidifies its position with 40M active users

Steven Loeb · May 21, 2014 · Short URL:

With Apple possibly buying Beats, the competition is only going to be hotter for Spotify

In terms of music streaming companies, there is Pandora, with its more than 250 million registered users, and then there is everyone else. Sitting at the top of that "everyone else" is Spotify.

While it remains the second most popular service, Spotify is also the company most likely to be toppled, or at least hurt, by another company making a big, aggressive move into streaming. For example, Apple deciding to purchase Beats Music.

A move like that is a potential game changer for the entire space, but more importantly for Spotify than for anyone else. So what is the company to do? It can start by securing its position above all comers by revealing some very impressive user numbers and growth.

The company revealed on Wednesday that is has passed 40 million active users, with a quarter of those, 10 million altogether, as paid subscribers.

Last we heard, in March of last year, Spotify had over 24 million active users, with six million paying subscribers. That means the company has been added roughly one million users every month.

The company has also been aggressive in its expansion over the past year as well. Last year, the company made its first moves into Asia by launching in three countries on the continent: Hong Kong, Malaysia, and Singapore. It also launched in five other countries at the same time: Mexico, Estonia, Latvia, Lithuania, and Iceland.

Spotify also launched services in Taiwan, Greece, Argentina and Turkey. In all, it is now active in 56 countries around the globe.

These numbers tell us one thing: Spotify has a solid position in the space, and it is not going anywhere. I mean, just compare it to its competitors:

Rdio, which was actually founded by Janus Friis, the co-creator of Skype, offers access to over 20 million songs in 51 countries around the world. The company has not revealed the exact number of users it has.

Deezer had only five million paying subscribers as of November 2013. Whenwhile, shut down its streaming service entirely in March.

So who does Spotify have to worry about? Perhaps Beats Music, if Apple gets its hands on it.

When it first launched, Beats allowed AT&T wireless customers who subscribed to a family offer of Beats Music (to get the service for $14.99 a month and install it on up to 10 devices) got the first 90 days of the app for free. AT&T customers who did not qualify for the family offer got their first 30 days free.

The promotion was apparently successful: 28,000 customers enrolled, and more than 70% have been converting to becoming paid subscribers. The app signed up about 1,000 paying subscribers a day in its first month.

The service is very young, having launched in January, and though user numbers have been somewhat disappointing so far , there is still plenty of time for it to grow. Give it access to Apple's iTunes customers, though, and it could explode.

Apple, of course, already has another music streaming service: the Pandora-like iTunes Radio, or "iRadio." That service has not exactly been setting the world on fire, so maybe Spotify doesn't have as much to worry about as we think.

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Joined Vator on is a social networking company which revolves around its music recommendation engine. Recommendations are made by comparing user data to the rest of the user community. This community gives more potential to grow into media other than music. This is most likely a reason why media giant, CBS, acquired for $280 million in May of grew from very modest funding compared to its competitors Pandora, ilike, MyStrands and others.



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Pandora, the leading internet radio service, gives people music they love
anytime, anywhere, through a wide variety of connected devices: laptop and
desktop computers, smartphones, connected BluRay players, connected TVs,
etc. Personalized stations launch instantly with the input of a single “seed” –
a favorite artist, song or genre. The Music Genome Project®, a deeply
detailed, hand-built musical taxonomy, powers the personalization or
Pandora. Using this musicological “DNA” and constant listener feedback
Pandora crafts personalized stations from the more than 800,000 songs that
have been analyzed since the project began in January 2000.
More than 75 million people throughout the United States listen to
personalized radio stations for free on Pandora through their PCs, mobile
phones and devices such as the iPad, and connected in-house devices
ranging from TVs to set-top boxes to Blu-Ray players. Mobile technology has
been a significant factor in the growth and popularity of Pandora, starting
with the introduction of the Apple app store for the iPhone in the summer of
2008. Pandora instantly became one of the most top downloaded apps and
today, according to Nielsen, is one of the top five most popular apps across
all smartphone platforms.

Pandora is free, simple and, thanks to connectivity, available everywhere
consumers are – at the office, at home, in the car and all points in between.
In 2009 the Company announced that Pandora would be incorporated into
the dashboard in Ford cars via SYNC technology; GM has already followed in
announcing plans to integrate Pandora into its vehicles and Mercedes-Benz
introduced their Media Interface Plus device that works with the
free Pandora iPhone app to provide direct control of Pandora from in-dash
stereo controls. This was all great news for the millions of Pandora listeners
who had been plugging their smartphones into car dashboards to listen to
personalized stations while driving. More than 50 percent of radio listening
happens in the car, making it a crucial arena for Pandora.

Today tens of millions of people have a deeply personal connection with
Pandora based on the delight of personalized radio listening and discovery.
These highly engaged listeners reinforce the value Pandora provides to: 1)
musicians, who have found in Pandora a level playing field on which their
music has a greater chance of being played than ever before; 2) advertisers,
who benefit from the multi-platform reach of Pandora, as well as its best
practices in targeting consumers for specific campaigns; 3) the music
industry, which has found in Pandora a highly effective distribution channel;
and 4) automobile and consumer electronics device manufacturers, who have
noted that incorporating Pandora into their product makes it more valuable
to consumers.

Pandora continues to focus on its business in the United States. The radio
arena has never been hotter, thanks to technology that enables radio to be
personalized to the individual and more accessible than ever before. Right
now millions of people listen to Pandora in the United States and we hope
someday to bring Pandora to billions of people around the world.

• 2000 – Tim Westergren’s Music Genome Project begins.
• 2005 – Pandora launches on the web.
• 2008 – Pandora app becomes one of the most consistently downloaded
apps in the Apple store.
• 2009 – Ford announces Pandora will be incorporated into car
dashboard. Alpine and Pioneer begin selling aftermarket radios that
connect to consumers’ iPhones and puts the control and command of
Pandora into the car dashboard.
• 2010 – Pandora is present on more than 200 connected consumer
electronics devices ranging from smartphones to TVs to set-top boxes
to Blu-ray players and is able to stream visual, audio, and interactive
advertising to computers, smartphones, iPads, and in-home connected