Spotify started trading on the New York Stock Exchange (NYSE) last week under the ticker name SPOT, after the music streaming service quietly filed for an initial public offering (IPO) last December. The company's next logical step moving forward is finding a way to further expand its user base in order to give investors the assurance that the platform continues to grow.
Spotify is reportedly planning to unveil a new version of its free service which will allow users to use the music streaming solution on mobile devices more easily, according to Bloomberg. Although the Sweden-based company has yet to confirm the report, Spotify is expected to officially announce the updated service in the next few weeks.
The report claims that the updated software will provide users more freedom in choosing the songs they want to listen to and gain a quicker access to the playlists. Spotify's current free version limits user control and only allows listeners to hear songs that it serves up randomly when a user selects an album or playlist. That means the upcoming new free version of Spotify will, in a way, resemble the service's ad-free paid version costing $9.99 per month.
Spotify's premium version currently accounts for less than 50% of its user base, though it is also responsible for 90% of the company's revenue amounting to 4.09 billion euros last year. Its free version, on the other hand, helps to get users to switch to the paid model.
The company attracted 157 million users at the end of last year, around 45% of which were actually paying for the service. This year, Spotify aims to grow its customer base to 200 million and generate 96 million paid subscribers.
By offering a free service that somehow mimics its paid version, Spotify is understood to be resting its hope for growth on the updated software and other initiatives in the future. It remains to be seen, however, how the company intends to turn those new users into paying customers through the planned new version.