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Spotify might still be loss making, despite revenues of $435m in 2012, but the service is incredibly popular and many think it might be gearing up to IPO.

These rumours have started since Spotify in December secured some $200m in credit lines and recently acquired a music algorithm company, Echo Nest.

If this does mean Spotify is about to get serious about profit, it comes at a time when competitors are more easily found – from Beats Music to Milk, Samsung’s new service.

I listened to Spotify’s Chris Maples (VP, Europe) at last week’s Digital Media Strategies 2014. There were some interesting titbits, from stats to Spotify’s approach to iteration and mobile, that I thought would be worth sharing here.

Let me know if you have any thoughts on Spotify’s future or its approach to subscriptions and product development.

Stats

Spotify: 

  • employs 1300 people.
  • and has 6m paying subscribers.
  • and more than 20m songs available.
  • with 20,000 tracks added every day.
  • available to 24m active users.
  • who have created 1bn playlists.
  • across 55 countries.
  • giving $500m back to the music industry. 

On freemium business models

Don’t be embarrassed of your free content. That’s where most people are in a freemium model. Paid and free content are equal partners, bedfellows.

On modes of consumption

Of all the music listened to via Spotify, this is how it breaks down per environment:

  • 17% in the car
  • 42% at home
  • 23% at work
  • 22% at the gym
  • 14% on public transport

On mobile

Spotify is now available to free users on mobile, the only caveats being no offline access and playlists will automatically play on shuffle.

Since this was introduced in December 2013 there has been a 78% increase in active mobile users.

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On adapting to new markets

Local barriers don’t mean anything to subscribers in a particular country. Demand in a market creates necessity.

Spotify insists on providing quality to each market, populating the Spotify archive with relevant content to each region before launch.

On demand for new features

Consumers understand the capability of tech almost better than techies. They expect useful features, if they’re not developed, someone else will develop them and users will quickly jump ship.

One example of this is integration of Facebook, which Spotify quickly realised it would have to work on, along with other social networks.

Iterating is key to Spotify, with ‘connect’ and ‘browse’ being added and updated recently. With devices becoming more interconnected (WiFi enabled speakers etc), the ‘connect’ feature feels like a smart move.

On passion for music

In a survey of Britain’s ‘one thing they couldn’t live without’, music came top.

There are more than 750,000 playlists on Spotify that users have created for funerals. If you’re curious, the most prevalent song on those playlists is Eric Clapton’s Tears in Heaven.

On content discovery

Chris Maples talked about how many Spotify users find the prospect of 20m songs a little daunting.

For these users, who want to use the service in ‘lean back’ rather than ‘lean forward’ mode, the ‘radio’ and ‘discover’ features were created. These are just services to surface and promote artists, they are demanded by users.

spotify discover

Read more articles on DMS 2014 and subscriptions: Verdens Gang, Axel Springer, New York Times, Financial Times.

Ben Davis

Published 12 March, 2014 by Ben Davis @ Econsultancy

Ben Davis is a senior writer at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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Comments (3)

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Brownb

That is great analysis,Enjoyed while reading.

over 2 years ago

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Ben

Hi Ben,

I think you've got your billions and millions mixed up in the first paragraph, unless Spotify are well on course for world-domination ;)

over 2 years ago

Ben Davis

Ben Davis, Senior Writer at EconsultancyStaff

@Ben

Haha. Indeed. Thanks for pointing out.

over 2 years ago

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