Spotify is a streaming music service launched in 2008 in Sweden. Spotify allows users to stream music from a vast catalog of more than 35 million songs and create playlists with collections of songs. Users can play music using the mobile app, desktop, or web version of Spotify. Users can either play music for free with periodic advertisements or pay for a monthly Premium Subscription for unlimited ad-free streaming. Thus, paid and free users comprise all of Spotify’s user base. Spotify pioneered streaming music, which has overtaken digital music downloads and CD sales as the dominant method of listening to music worldwide.
Though Spotify is mostly used for streaming music, users can also stream other audio-based content including podcasts, guided meditations, music videos, and stand-up comedy. Spotify connects with Facebook, providing a social component to the app. Users can follow friends, share playlists, and send songs via direct message. The app has upped its music discovery features in recent years, showcasing curated playlists, algorithm-driven radio stations, recommended artists, and other music exploration tools.
Spotify is available in more than 65 countries and territories, including most of Europe, the Americas, Australia, and parts of Asia. Spotify continues to expand its service area and improve its offerings to grow its user base. The streaming music space is noisy – Apple Music and Pandora are Spotify’s primary competitors; YouTube Music, Amazon Music, I Heart Radio, Soundcloud, and Tidal are just a handful of competitors in the streaming music space. So, how many users does Spotify have?
In a fiscal report from Q1 2018, Spotify announced that it finished the quarter with 75 million Premium Subscribers and 170 million monthly active users (MAUs). A user base of 75 million paid subscribers represents a 45% increase within the last year. Of the 170 million MAUs, the report indicated that 99 million MUAs are ad-supported listeners. Spotify cited the popularity of Family and Student subscription plans as contributing to high user retention over the past quarter. Family plans allow members of the same household to link their accounts so they pay a lower subscription fee per person, while Student plans allow undergrads to get a Premium Subscription at a lower monthly rate.
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Spotify reported 75 million paid subscribers as of June 2018, showing an explosive growth in popularity looking at historical numbers. Spotify doesn’t regularly release detailed information about “premium churn,” the rate at which users cancel their paid Premium Subscriptions. In the IPO filing, Spotify reported that churn is decreasing every year; churn rate fell below 5% in 2018, which the company noted was a milestone. Spotify projects having 90-96 million paid subscribers by the end of 2018.
Statista’s chart shows a breakdown of monthly active users for the top streaming services within the U.S. Apple Music, which launched in 2015, has been outpacing Spotify in terms of growth in recent years within the U.S. Apple’s three-year old streaming service reported 36 million+ paid subscribers in February 2018, meaning Apple Music has managed to accrue half as many subscribers as Spotify in just three years. Pandora Radio, an algorithm radio based streaming service, and SoundCloud, Spotify’s indie relative, are immensely popular but not as dominant as Apple Music or Spotify. Google Play Music, which will eventually consolidate with YouTube Music, has a strong user base and could become a formidable competitor as Google ramps up its investment to develop the product.
Although Spotify is known as the uncontested leader in streaming music, Apple Music is a fierce competitor particularly in the U.S. market. Key differences between Spotify and Apple Music include:
Both services have attempted to lead the charge with exclusive content with mixed success. Apple Music and Spotify have both debuted high-profile albums exclusively, with popular artists like Frank Ocean and Taylor Swift, in an effort to differentiate themselves to new users. Recently, record labels have been moving away from signing exclusive album release deals with streaming services because it hurts artists by limiting their audience. Live performance and music video debuts are increasingly in vogue—both Spotify and Apple Music record exclusive live sessions and partner with artists for exclusive music video releases.
As an international, device agnostic music streaming service, Spotify’s user base is broad and diverse. Spotify is especially popular with Millennials, a fact touted on their Spotify for Brands microsite. The music streaming juggernaut keeps much of its data under wraps, but has revealed that Millennials stream 72% of all music on the platform and 68% of those streams are via a mobile device. Europe, North America, and Latin America are Spotify’s largest markets for paid subscribers.
A survey in March 2018 indicated the following age breakdown for Spotify users with the U.S.: