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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