Congratulations Spotify: now >1 M users
By Fredrik, March 3rd, 2009A short note to congratulate Spotify on reaching the first million registered users. Credit to the entire team for growing the subs base at this fast rate with consistently high quality of service. Check out their blog for more updates, which for example today announces the addition of several of the previously missing Domino artists to the catalogue, including Pavement and The Magnetic Fields.
A large number of sites have popped out that complement Spotify’s service, e.g. for sharing playlists or exploring a particular theme. One of my favourites is Spotinews - which do a good job in picking out nuggets from the continous catalogue updates.
March 3rd, 2009 at 9:02 pm
As a devoted Spotify user, I am actually not surprised by the swift uptake of their free service! It’s solid and it’s free - why not use it, and why not recommend it to others? Still, of course, that is in turn due to an excellent effort by the Spotify team.
But I am still not convinced about Spotify’s monetization.
For the ad-funded service, Spotify needs to move beyond voice ads. They are intrusive, they are expensive to produce (especially given the need for localized version), their impact is hard to track, and they don’t produce any benefit for the end-user. Why haven’t Spotify yet leveraged the tour- and merchandize channels, for example? The outdoors season is starting now, where are the advertorials on upcoming music festivals?
For the premium service, of course I don’t have any numbers on conversion rates. But a gut feeling would be that they are lower than could be expected, given that the monthly cost is less than the price of a CD. The reason would then be that Spotify satisfies only one of several usage scenarios in the course of a day. Of the “four loudspeakers” in life - PC/Laptop, Mobile, HiFi system and Car - so far Spotify covers only one. The treshold for conversion may come only when Spotify is available over several more of these, thus reducing the need for the consumer to rely on other services as well. Case in point: if I am to rely on legal services, then I should first pay Spotify for music in my PC, then pay Telia for music in my phone. But then Telia also gives me music on my PC - so why did I pay for Spotify in the first place?
IMO, Spotify should gradually consider itself a platform, and initiate selected partnerships across the board to expand its reach to “new speakers”. Going it on their own risks unnecessary costs and the risk of the marketing window closing as competitors arrive.