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A Whopping 25% Of Spotify's 60 Million Active Users Are Paying Customers

When you offer your service for free, can you also get people to pay? Spotify can.

A Whopping 25% Of Spotify's 60 Million Active Users Are Paying Customers
[Photo: Flickr user Kārlis Dambrāns]

Spotify may have fallen out with Taylor Swift last year, but even a high-profile squabble with a famous pop star isn’t enough to slow down the world’s most popular streaming music subscription service.

According to figures published today, Spotify added 10 million new users in the final two months of 2014, bringing it to a total of 60 million active users. This is likely due to a pre-Christmas promotion by the company, in which users were able to sign up for three months at $0.99, as opposed to the usual cost of $9.99 per month.

"We had an amazing 2014 at Spotify and owe it all to you, the music fans who listen, discover, share and celebrate music and artists with us every day of the year," the company wrote in an official blog post.

Even more impressive is Spotify's ability to translate free users into paid customers. The service now has 15 million paying subscribers—or a 25% conversion rate. When Spotify last published its stats, it had 12.5 million paid users, with an active base of 50 million. That indicates the ratio of paid-to-free users is holding steady as the company moves beyond early adopters.

Comparing Spotify to its rivals isn’t entirely straightforward, since different companies operate on different business models—while some refuse to disclose their number of subscribers, or their conversion rate. The Apple-owned Beats Music reportedly had just 250,000 users last year, despite the sky-high valuation Apple placed on it. Deeper, meanwhile, reportedly has 16 million users, with 6 million of these being paid subscribers. Subscription-only service Rhapsody supposedly has 2 million paying users.

Nonetheless, Spotify's achievement is an impressive one—and its ability to monetize arguably more so.

2014 may have been a big year for Spotify, but 2015 is likely to be even bigger, with a reported IPO in the cards, and growing challenges from nontraditional rivals, such as YouTube and Jawbone, which are both looking to get in on the streaming music game.

[via The Guardian]