Spotify reaches new milestone with 15 million paying customers

Spotify, the streaming music service, has signed up 15 million subscribers, a sign of rapid growth for the company and an implicit rebuttal in an industry debate over whether people are willing to pay for music online. Spotify, which is available in both free and paid tiers, announced its latest milestone in a brief blog post on Monday, just eight months after it said it had reached 10 million. The service, available in 58 countries, is now used by 60 million people, meaning that for every person who pays the subscription rate of about €10 a month, another three use the advertising-supported free version.

In just over two years, Spotify’s subscriber ranks have tripled, and record companies and distributors now say that it is one of their top revenue sources. Spotify says it has paid out more than $2 billion in music royalties since it started in 2008.

Yet the service remains a focal point of a broad industry debate as consumers shift from paying for CDs and downloads to streaming it online, often free. Last year, Taylor Swift removed her entire catalog from Spotify, apparently because the company would not restrict it to its paying subscribers. Major labels have also been pressuring free outlets like YouTube and SoundCloud to generate more revenue.

The ensuing coverage of Swift’s dispute in the news media and on social media gave Spotify perhaps its biggest publicity rush, and may have helped attract new customers. When the service last disclosed user numbers, two months ago, it had 12.5 million paying subscribers.

But Spotify’s continued growth also points to the strength of the company’s so-called freemium model, in which free music is used to lure customers to pay for more access. In late 2013, the company began letting people listen to more free music on mobile devices, where a majority of Spotify’s listening now takes place.

“Our free service drives our paid service,” Daniel Ek, Spotify’s co-founder and chief executive, wrote in a blog post in November, in response to Swift’s withdrawing her songs. Spotify, which lets users stream any of the millions of songs in its catalog, is the most popular service of its kind. Pandora Media, the biggest Internet radio provider, says it has more than 76 million regular users, a vast majority of whom listen free. SiriusXM, the satellite radio service, recently announced that it has 27.3 million paying subscribers.

- The New York Times service