Spotify’s Monthly Average Users (MAU) Dropping

Guest post by Eliot Van Buskirk of Evolver.fm.

A tipster alerted us to an interesting figure regarding Spotify over the weekend. According to AppData, fewer people have used Spotify to listen to music over the past month (on the desktop, smartphone, tablet, with Facebook Connect turned on), than they did in the previous month ending July 20.

This would appear to be somewhat alarming, even though Spotify is still by far the most popular music service that connects to Facebook at number 9 on AppData’s chart, behind general interest juggernauts like Zynga’s The Ville (of course) and Yahoo Social Bar (huh?).

“Spotify’s MAUs dropped 15 percent since August 10,” wrote the tipster. “Spotify has dropped four million monthly active users since August 10, according to AppData. [I'm] not sure what’s behind this decline, but I’m not aware of any new changes to the way MAUs are reported, so something is up.”

Indeed, according to AppData’s chart, above, Spotify’s MAU did begin a four-million user dip on August 10. Meanwhile, AppData’s number for the weekly users of Spotify also dropped precipitously starting a month ago:

Perhaps the real question is: What happened in early-to-mid-June that might have boosted the number of Spotify users, but only temporarily? After all, MAU works like tennis rankings: If a player wins Wimbledon one year, they need to win it again the next year to keep those points. Even a great showing in the year after a win (i.e. making it to the final but not winning it) constitutes a loss in ranking points. Nothing in the above charts would indicate that that’s not basically what happened to Spotify here.

So, what happened in early-to-mid-June that might have boosted Spotify usage, but only temporarily?

For one, the Facebook App Center launched on June 8. Over the following days, Facebook promoted the App Center, and within it, Facebook’s best pal in the music business, Spotify. It stands to reason that people with only a passing interest in using something like Spotify would have checked it out due to all of that promotion on Facebook, and then decided it wasn’t really for them, so a month later, they weren’t using it.

It seems pretty normal for any product that gets a sudden rash of promotion to enjoy a temporary boost among consumers. If that’s what happened here, there’s nothing for Spotify to be concerned about, even though it appears today that it has lost four million over the past month and three million users in the past seven days alone.

If this trend continues, we’ll be worried about Spotify’s prospects (and by extension the premise that freemium subscription music is going to make up for physical revenue loss due to digitization). But for now, this looks like a blip — especially because the daily users are on the rise:

What’s more interesting to us is that we have yet to hear from Spotify or anyone else why it says it has only 15 million active users (at last count) when Facebook’s count is 22.6 million, and AppData’s count is 22.8 million, even after this drop. We suppose it comes down to the definition of “active,” with Spotify drawing the bar a bit higher than do both Facebook and AppData, with positive ramifications for its conversion ratio from free to paid.