Spotify climbs to 20M paid subscribers, picks up $526M in funding ahead of Apple Music launch

Posted:
in General Discussion edited June 2015
With the debut of the competing Apple Music service only weeks away, Spotify on Wednesday announced that its total subscriber base has climbed to 75 million people, 20 million of whom are subscribers to its more profitable Premium tier.




The numbers represent fairly rapid growth, since at the beginning of 2015 those same figures were 60 million and 15 million, respectively. A year ago, the company had just 40 million subscribers, a quarter of them on Premium.

On Tuesday Spotify closed a $526 million funding round, $115 million of which came from European telecommunications firm TeliaSonera. The two companies will cooperate on areas like media distribution, data analytics, and advertising, according to the Wall Street Journal. The new funding gives Spotify a value of $8.53 billion.

Both announcements come hot on the heels of Monday's introduction of Apple Music, which counts Spotify as its primary competition. The services each offer a mix of on-demand streaming and radio content, and cost $10 for full functionality.

Spotify however lets people access on-demand music for free on an ad-supported tier, and is venturing into podcast and video content. The only free Apple Music content will be Beats 1, a live radio station hosted by celebrity DJs in Los Angeles, New York, and London.

Initially at least, Spotify will also enjoy much broader platform support, with apps for iOS, Android, Mac, Windows, the Web, Roku, PlayStation, and more. When Apple Music launches on June 30, it will be limited to iOS, Mac, and Windows, with Android and Apple TV ports due in the fall.

Earlier this week a rumor claimed that Apple is hoping to reach 100 million subscribers. That number would be a first in the music industry, and likely impossible without blanketing as many platforms as possible.
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Comments

  • Reply 1 of 48
    davendaven Posts: 505member
    I was surprised Apple limited the free access. Seems odd that music should cost more than Netflix.
  • Reply 2 of 48
    daven wrote: »
    I was surprised Apple limited the free access. Seems odd that music should cost more than Netflix.

    Let me know when there's more than 30 million movies to stream on Netflix and you can download them for offline viewing. :rolleyes:


    Surprised people were willing to invest. Spotify can't turn a profit.

    Then again, people still buy Amazon stock, so...I guess if the media loves you and you can get the courts to do your dirty work, why not?
  • Reply 3 of 48
    Is it true the record labels are Spotify investors?
  • Reply 4 of 48
    pfisherpfisher Posts: 758member

    Spotify and the others have great services. No reason why everyone needs or would want to go through Apple for everything.

     

    Also, do we want one corporation being the jack of all trades? We all know what happens when corporations get too big. There's a case to be made for being smaller and more focused.

     

    Apple has the curse of having to grow even when they are so big. Just like any other large company. But when you are so big...

  • Reply 5 of 48

    I see competition as a good thing for consumers, so looking forward to Apple, Spotify and others competing in this space.

     

    In the end, it won't matter that Apple borked the keynote music presentation at WWDC. It will come down to product.

  • Reply 6 of 48
    rogifanrogifan Posts: 10,669member
    I use Spotify and like it. I'll give Apple Music a try since it's free for 3 months but I didn't see anything that would really entice me to switch. You don't need a subscription for the Beats 1 radio station (at least not on Apple devices) and I'm already paying for iTunes Match.
  • Reply 7 of 48
    nairbnairb Posts: 253member

    I wonder how many of those paid subscribers are people who decided that they want streaming music and chose Spotify.

     

    In the Netherlands, some of the big internet providers are offering free premium spotify accounts as a bonus. Of course you pay for in higher internet premiums, but lots of people have accounts through these providers. It helps lock people into the providers, and also into Spotify. Unless people would be unlikely to change to Apple, or any other competitor,  unless they are also unhappy with their internet provider.

     

    My guess would be that these companies negotiated a discount with Spotify in exchange for signing up their customers.

  • Reply 8 of 48
    d4njvrzfd4njvrzf Posts: 797member
    Quote:
    Originally Posted by TheWhiteFalcon View Post





    Let me know when there's more than 30 million movies to stream on Netflix and you can download them for offline viewing. image





    Surprised people were willing to invest. Spotify can't turn a profit.



    Then again, people still buy Amazon stock, so...I guess if the media loves you and you can get the courts to do your dirty work, why not?

    Doesn't Amazon just keep reinvesting in itself? Amazon Web Services weren't built out of nothing.

  • Reply 9 of 48
    lkrupplkrupp Posts: 6,782member

    So it’s all over for Apple Music, right? According to this thread it’s unanimous, Apple Music is D.O.A. Glad that’s been decided. Let’s move on to the next Apple failure.

  • Reply 10 of 48
    Quote:

    Originally Posted by lkrupp View Post

     

    So it’s all over for Apple Music, right? According to this thread it’s unanimous, Apple Music is D.O.A. Glad that’s been decided. Let’s move on to the next Apple failure.




    You forgot to mention some tidbit about how Tim needs to be fired. Also, Steve Jobs.

  • Reply 11 of 48
    Beats will do fine and spotify will live on.
    The only ones getting screwed are the artist.
  • Reply 12 of 48
    davendaven Posts: 505member
    Quote:

    Originally Posted by TheWhiteFalcon View Post





    Let me know when there's more than 30 million movies to stream on Netflix and you can download them for offline viewing. image

     

    The better deal is Apple's family plan. I'm a lazy old fart. I have a large music collection from my CD days and play that on road trips. I recently took a trip halfway across the USA which was 32 hours of driving time each way. I didn't realize it until my return that I have something in the neighborhood of 40+ hours of audio so I didn't get a lot of repeats. Nonetheless, when I returned and wanted to listen to music, I tried the current Apple radio station. Yup, a curated list of songs that wasn't that long and it did repeat itself fairly quickly. I used to listen to AOL radio but that bit the dust.

     

    For me, I'll give Apple's new free radio a go and just add to my collection for road trips. I'm retired and will be cutting the cable cord this summer. I'm not the type of person that likes monthly bills but I'm probably in the minority and not in the target market for streaming services.

  • Reply 13 of 48
    zoetmbzoetmb Posts: 2,419member
    Quote:

    Originally Posted by DaveN View Post



    I was surprised Apple limited the free access. Seems odd that music should cost more than Netflix.

    Many DVDs and even Blu-rays, especially for catalog product have been less expensive than the CD soundtrack.   It has always been a strange dichotomy.  

     

    Quote:

    Originally Posted by AppleinsiderFrm View Post



    Beats will do fine and spotify will live on.

    The only ones getting screwed are the artist.

     

     

    Quote:

    Originally Posted by sog35 View Post

     

     

    artists should start their own label then.  The labels take all the risk and provide all the capital.  If an artist wants to self-publish they can.

     

    AppleMusic is giving them that platform.


     

    Agreed that the labels take the risk and provide capital, if the labels treated the artists fairly.   Also, it's not just the labels that are screwing artists.   Artists basically get screwed by everybody.    I was at an AES meeting last night that discussed copyright and the music industry and some interesting numbers were displayed.    These aren't exact, but in order for an artist to earn minimum wage, they need something like 186,000 plays on a streaming service (and IIRC, those are monthly plays to earn minimum wage).

     

    Back in the days of the 78 RPM record, there was a concept called "breakage".   Because those shellac records were so breakable, record labels reduced sales levels by 10% when calculating royalties due.   Do you know that some labels still include breakage in their formulas, even for downloads and streaming revenues?  Only the very biggest artists ever earn out their royalty advance.  Most artists never see another penny from their label.

     

    In the United States, AM and FM radio stations do pay the writers of songs via payments to ASCAP, BMI and SESAC, but they do not pay performance rights to the recording artists or labels.   So broadcast radio gets a free ride.     There's an historic reason for this:  in the early days of radio, music on the radio was performed live, and the artist would receive a payment for appearing.   But the radio stations didn't necessarily know who wrote the songs, so the performing rights societies were set up to handle writer's rights.   That never changed when radio moved to playing recorded music.   The only other countries that don't pay performance rights for radio play are China, North Korea and I think Iraq.  

     

    Digital media does pay royalties for performance, mostly via the Sound Exchange, but most artists literally receive pennies.    In addition, there is no performance right on U.S. recordings prior to 1972, so they get those recordings for free.    Flo & Eddie have sued over this on the basis of unfair competition and they've won some court cases in New York, California and Florida.   

     

    And even through writers royalties on recorded music is statutory (9.1cents per sale, per song), writers frequently get screwed out of at least some of that money as well.  It was said at the meeting that it usually winds up being around 7 cents, but traditional publishers take 50% and the performing rights organizations get their piece as well.

     

    Overall, music industry revenues in the U.S., adjusted for inflation, are at about 35% of their 1999 peak even including streaming, downloading, licensing, etc.   The good news is that if the industry can get 50% of U.S. households to pay about $11 a month, total industry revenues would once again reach their former peak, although that's counting gross subscription revenue to a service like Apple Music, Pandora or Spotify as part of music industry revenues.  

     

    And finally, please explain how Apple Music is giving artists such a platform.   If I'm an independent artist who has funded my own recordings, how do I get my recordings on Apple Music?   I was under the impression that Apple Music was not an open platform - that it was contingent upon deals between Apple and the traditional music companies.  

  • Reply 14 of 48

    Burning a big pile of money there.

     

    iTunes is installed on many more devices than there will ever be Spotify subscriptions.

     

    In 20 days I cancel Spotify and crank up Apple Music. I am not alone.

  • Reply 15 of 48
    sector7gsector7g Posts: 155member

    most people i know who are on spotify are those who got it free with the mobile phone package

  • Reply 15 of 48
    sirlance99sirlance99 Posts: 1,142member
    likely impossible without blanketing as many platforms as possible.

    "likely impossible"!? It is impossible without going to every other platform.
  • Reply 17 of 48
    imt1imt1 Posts: 87member
    Quote:

    Originally Posted by AppleInsider View Post



    Spotify however lets people access on-demand music for free on an ad-supported tier, and is venturing into podcast and video content. The only free Apple Music content will be Beats 1, a live radio station hosted by celebrity DJs in Los Angeles, New York, and London.

     

     

    Not exactly correct. Spotify free is shuffle only not On-Demand. Also, Apple music free is not just limited to Beats1. It also gives you the dynamic stations you create by song, artist, etc. Limitation is 6 skips on Free. 

  • Reply 18 of 48
    Spotify is scared shitless and they should be.
    They will not be able to keep up although they should survive.

    Traditional radio stations should be scared as well.
  • Reply 19 of 48
    sirlance99sirlance99 Posts: 1,142member
    applezilla wrote: »
    Burning a big pile of money there.

    iTunes is installed on many more devices than there will ever be Spotify subscriptions.

    In 20 days I cancel Spotify and crank up Apple Music. I am not alone.

    Not really. Spotify will still continue to thrive. I know a lot of people who are not switching because they like Spotify so much and they can play it on everything including Sonos. So stop acting like everyone is just suddenly going to stop using Spotify and switch to Apple Music because they're not. And that includes myself who is going to Keep Google Play Music as is already does everything Apple Music does. More actually.
  • Reply 20 of 48
    dimmokdimmok Posts: 359member

    Count one less Spotify user come June 30th. Im going all the way with Apple Music.

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