Spotify grabs 175k paying US customers; valued at $1.1b

After launching less than a month ago, the music subscription service Spotify has been reported to have 1.4 million users in the United States with around 175,000 of those being paid customers. AllThingsD, who reported this via a source close to the company, also mentioned that this equates to a 12.5% conversion rate of free to paid customers. Subscriptions cost $5 per month for unlimited streaming with no ads and $10 per month for mobile device streaming.

While this doesn’t quite stack up to the 15% conversion rate in Europe, which reports 1.6 million paying users for a total user base of around 10.6 million, it is still a massive feat for the company that launched in the United States just last month and continues to maintain an invite-only status for free access. Spotify’s nearest competitor in the US is Rhapsody, which has around 800,000 paid subscribers; however the gap between the two music streaming giants is closing rapidly.

Thanks to the huge success of Spotify in the US, the overall valuation of the company has jumped to $1.1 billion following $98 million in new deals from investors - this is despite the launch in the United States costing the company $98.15 million. Obviously investors like the looks of Spotify’s recent figures and the huge growth that it is currently experiencing in the United States; look out Google Music and iCloud.

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I'll wait for the service to get better. On two different wireless networks, the service disconnected on me. Still, it has potential to be very good.

I think spotify needs to add a radio service or a random play service that plays things similar to what you have and what you have in your playlists. without this people like me have little to gain from their paid service. I already own most of the music i like so they need to introduce me to new music

I still prefer Rdio more than Spotify. I can access it through the web, it has music recommendation service (I can't for sure Spotify have this or not, but at least I couldn't find it) and more importantly the search result in Spotify is more focused on individual tracks. For my listening preference, I seldom create playlist and Rdio fills the search result with album art work which makes it easy for me to add album to my collection right away. The only thing concerns me is that considering Spotify have stolen the limelight, it would be very difficult for other music subscription services to gain subscribers and I hate to see Rdio gone because it's such a great service!

I mentioned this yesterday briefly. Microsoft should have really opened up the Zune Music service and made it available on iOS and Android. Instead they kept the service tied to WP7. I so would have subscribed with Zune if it was available on Android. But now I am a paying Spotify customer and I learned that Spotify has a lot more music than Zune.

Love their service.

UndergroundWire said,
I mentioned this yesterday briefly. Microsoft should have really opened up the Zune Music service and made it available on iOS and Android. Instead they kept the service tied to WP7. I so would have subscribed with Zune if it was available on Android. But now I am a paying Spotify customer and I learned that Spotify has a lot more music than Zune.

Love their service.


I never brought music through Zune store but used the Zune software for music playback quite a while. The major turnoff to me is that the album artworks fetched from the Microsoft servers are low pixel and sometimes not even correct.

sopharine said,

I never brought music through Zune store but used the Zune software for music playback quite a while. The major turnoff to me is that the album artworks fetched from the Microsoft servers are low pixel and sometimes not even correct.

Yeah, I know what you mean.

What I did (because I am extremely anal) is I used MP3 Tag to place all the information for each album and I always downloaded at least 600x600 album art.

In the Zune software, you specify it to download for missing art. Other than that, I love the Zune software for my local music.

UndergroundWire said,
I mentioned this yesterday briefly. Microsoft should have really opened up the Zune Music service and made it available on iOS and Android. Instead they kept the service tied to WP7. I so would have subscribed with Zune if it was available on Android. But now I am a paying Spotify customer and I learned that Spotify has a lot more music than Zune.

Love their service.

Can't you access the Zune Pass from the Zune.net web site? You just login and go...though not sure if this will work on Android devices.

I really like it for the fact that I was using satellite radio, and this service is cheaper ($10/mo) to basically use it on any of my computers and use it in my car via Bluetooth. Plus, I can pick out my own music. Kind of an all around win.

I've been enjoying the free service! The ads don't bother me. It would be nice to have access to the music while on the go with my iPhone. Wish that were free with ads too. I've been enjoying it at home and at work though. Hope they keep increasing their deals with the record labels. It is annoying when I find a track I want to listen to and a message pops up saying that it is only available in Europe.

The free service is excellent for what it is. Nice to be able to listen to a full album a couple of times without paying for it to fully evaluate if I like it enough to purchase. The 10-second sample iTunes gives + the listener reviews never really helps.

Right now, I'm paying for their highest tier of service. Though, the reason I am doing it is to listen on my iPhone, mainly while driving. Unfortunately, there is no Artist Radio feature on the mobile version, which is kind of a deal breaker. I need to either build my playlists before driving or manually select songs while driving, which is pretty annoying. From what I've read up on, people have been complaining about this for months. And it's a shame. I am also subscribed to Rdio, which I am trying to compare to Spotify, and while it does have the artist radio feature, it's algorithms suck, and the music ends up all over the place. But Spotify has a broader selection of music.... Choices, choices...

I ended up sticking with Rdio. The music collection is smaller (right now), but Rdio's music discovery features are much better. Rdio also seems to manage their music collection more carefully. Every artist I've run across has a picture, a bio, their influences, who they've influenced, and similar artists. I was lucky if Spotify had a picture for the artist.

I don't think there is an "Artist Radio" feature in the desktop version either. Am I missing something? That would be nice, but then there is also Pandora that is free.

Shadrack said,
I don't think there is an "Artist Radio" feature in the desktop version either. Am I missing something? That would be nice, but then there is also Pandora that is free.

In the desktop application you have the radio, which you probably know about, and you have the ability to search for an artist, and then on the artist page you have the tabs like Overview, Biography, Related Artists and Artist Radio.

I've not noticed it for all artists, but if you want to torture your ears by means of a working example search for Nickelback.

Elliott said,
I ended up sticking with Rdio. The music collection is smaller (right now), but Rdio's music discovery features are much better. Rdio also seems to manage their music collection more carefully. Every artist I've run across has a picture, a bio, their influences, who they've influenced, and similar artists. I was lucky if Spotify had a picture for the artist.

There are plugins for Pandora like features. Do a Google search you'll see.

I used to use Spotify, but i found myself getting ZunePass instead. It's alot better, but good on you Spotify, it's a great service. Just not the best .

Xerax said,
I used to use Spotify, but i found myself getting ZunePass instead. It's alot better, but good on you Spotify, it's a great service. Just not the best .
Agreed, I am trying to like Spotify, but I don't see the appeal to it, as I find Zune pass to be much better. Plus, I dig the keeping 10 songs, and the ability to use it everywhere (PCs, Zune HD, WP7, Xbox).

tsupersonic said,
Agreed, I am trying to like Spotify, but I don't see the appeal to it, as I find Zune pass to be much better. Plus, I dig the keeping 10 songs, and the ability to use it everywhere (PCs, Zune HD, WP7, Xbox).
Yeah. 10 songs and streaming on my 3 PC's, Xbox and WP7.

tsupersonic said,
Agreed, I am trying to like Spotify, but I don't see the appeal to it, as I find Zune pass to be much better. Plus, I dig the keeping 10 songs, and the ability to use it everywhere (PCs, Zune HD, WP7, Xbox).

If you have those devices...otherwise it's not much good. I do like the keeping 10 songs but a US only feature.

Xerax said,
I used to use Spotify, but i found myself getting ZunePass instead. It's alot better, but good on you Spotify, it's a great service. Just not the best .

I'm using the full subscription Spotify since day one it came out in The Netherlands, but I'm sure looking forward to a Zune pass. This because of the 10 free songs it offers. But since Microsoft doesn't care much outside the US, i'm glad Spotify opened it doors.

I just hope that Warner Bros Music doesn't ruin the service in the near future, like it did for: Planet Music, Jaha, and some other dutch music services.

Oh, and the best thing I love about Spotify??? Works perfectly besides tracks you have saved on your pc that are not available on Spotify. Many other services I knew did this....

I agree. When comparing the premium services, Zune Pass wins (unless you are factoring in non-Microsoft devices like Android or iPhone into the equation).

Peter van Dam said,

I'm using the full subscription Spotify since day one it came out in The Netherlands, but I'm sure looking forward to a Zune pass. This because of the 10 free songs it offers. But since Microsoft doesn't care much outside the US, i'm glad Spotify opened it doors.

I just hope that Warner Bros Music doesn't ruin the service in the near future, like it did for: Planet Music, Jaha, and some other dutch music services.

Oh, and the best thing I love about Spotify??? Works perfectly besides tracks you have saved on your pc that are not available on Spotify. Many other services I knew did this....

What are you talking about? Do you think international record companies make it easy for Microsoft to do their Zune Pass bit, much less even sell their music a la carte? I think Microsoft would actually like to expand their Zune marketplace store to other countries, but licensing deals aren't that simple unfortunately.

Even American record companies gave Microsoft a hard time with trying to sell music when it first launched. They wanted a piracy tax of $1 for each of the first Zunes sold.