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Report: Spotify Hits 3 Million Paid Users

January 26, 2012

Spotify has reached 3 million paid subscribers, 20 percent of its entire user base, the Financial Times has learned.

That's up from the 2 million paid users it had in September, and 2.5 million in November, at which point paid subscribers were 15 percent of the Spotify user base, the FT said.

"We have achieved some pretty great results in terms of the ratio of paid users," Spotify's chief content officer and U.S. managing director, Ken Parks, told the FT. "We have an enormous internal effort to drive conversion and engagement with the service. We are very focused on growing in our existing 12 markets as well as expanding in other markets."

The FT said rate of paid subscribers excludes those users who tested out Spotify's premium service for a 30-day trial period but did not sign up once the month was up. However, Parks said that the free trials have helped push users in the U.S. and Europe to sign up for Spotify's premium service.

"This is a healthy model," he said. "As it scales it gets better for everybody."

Parks also noted that most of Spotify's paid subscribers are under the age of 30. "That's a remarkable number of people who are generally hard to monetize," he added.

Spotify did not immediately respond to questions about the latest stats.

Spotify's adoption rate is rather impressive; the company was reportedly gaining about 250,000 new userseach day for the week following the announcement of Spotify's integration with Facebook.

However, the music platform's growth could be hindered by the caps Spotify earlier this month placed on free listening for U.S. users. Once unlimited, Spotify now offers free listening for the first six months, after which users are restricted to 10 free hours of music per month and five plays per track, Spotify's updated Terms of Service reads.

Spotify costs $4.99/month for ad-free listening on the desktop or $9.99/month for ad-free listening on the PC as well as streaming via the Spotify mobile app.




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