Music industry analyst and fellow blogger Mark Mulligan posted an analysis of Spotify‘s progress in adding listeners and converting those listeners to premium subscribers recently. Spotify has enjoyed great audience growth in its first year in the US, driven in particular by its integration with facebook earlier this year.
Spotify just hit 20 million users on its facebook app, having added half a million in less than 2 weeks from the 3rd to the 15th of May. That number represents their global, not just US based, audience. Pandora has 100 million registered users in the US.
Spotify appears to be doing a pretty good job of converting those users to paying premium subscribers, their conversion rate globally against the 20 million registered users is 17%. (There is no way to understand what it is in the US alone). Spotify’s premium service comes with no ads, unlimited streaming, and at the higher tier the ability to use the services mobile apps.
Mulligan notes that conversion rates seem to be declining against the massive uptake Spotify has enjoyed via facebook integration. This is of course a natural phenomenon where broader reach is going to result in fewer conversions to paying customers. But among active users, Spotify is converting a strong 27% to subscribers. At that rate, they’ll have more than 6 million paying subscribers by next year.