After years of struggle, 2015 looks to become big for Spotify

When Spotify released its user numbers in the middle of November, I wrote a piece on netzwertig.com (in German) stating that the on-demand music service finally seemed to have initiated some kind of exponential growth. In order to illustrate my point, I created a graph visualizing the growth in users and paying subscribers over the past years.

My conclusion was certainly quite early, as the curve only indicated a possible trend of exponential growth. But I felt it was a bet I could afford. Fortunately, I do not need to revoke my statement: Only 2 months later, Spotify announced new numbers: 60 million users in total, of whom 15 million are paying. In November, the numbers were 50 million and 12.5 million.

Correspondingly I updated my chart, which now clearly shows an accelerating growth (for users reading via RSS the embedded Google sheet might not be shown).

Quartz realized that it was time for a visualization of the Spotify user growth as well. The site also correctly points out that since Taylor Swift withdrew her entire catalog from Spotify in November, the numbers increased by 20 %. That suggests that the massive media attention that was generated by Swift’s decision actually might have helped Spotify to acquire more users.

For a couple of years, Spotify, the pioneer of legal on demand streaming, had something of a growth-problem. Now, for the first time ever, the curve points at the right direction. Unlike some other online industries where a niche can be lucrative, the on-demand music business with its significant licensing costs and complex stake holder structure can only work if there is massive scale.

We still need to wait and see whether the current trend continues. If it does, 2015 will become the big year of Spotify (and, if the market allows for, the year of a Spotify IPO).

6 comments

  1. Some see the main reason for the growth in a lot of special offers, a de facto price reduction: https://musicindustryblog.wordpress.com/2015/01/13/what-spotifys-december-growth-tells-us-about-pricing/

    A point that I also made on netzwertig.com (also in German): http://netzwertig.com/2014/10/21/musikstreaming-der-preiskampf-von-spotify-und-apple-ist-eine-gute-nachricht-fuer-musik/

    In a nutshell: 10 Dollars/Euros per month is more than even most music enthusiasts are willing to pay. Effect: People use legal or illegal ways to listen to music for free instead. And there are plenty of them eg. YouTube. It’s in the hands of the music industry now to decide…

    • It probably contributed. Lets see whether there will be break in the trend of paying subscribers when the next numbers are being released.

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