Spotify Releases U.S. Figures, Sees More Than 13 Billion Streams
Spotify launched just over a year ago in the United States (July 14, 2011) and during that time has garnered more than three million U.S. users, with roughly 20% of them paying subscribers. While not everyone is loving the service, and with plenty of content owners still not entirely satisfied with their end of the deal, Spotify has shared some revealing numbers of their United States users and their activity.
The infographic released by Spotify (below) states that American users have streamed more than 13 billion songs and have shared 27,834,742 songs since launch. 55.3% of those shares came through Facebook and 41.5% within Spotify itself, while 2.7% through Twitter and 0.3% through “other” services.
The high amount of Facebook shares is undoubtedly due to Spotify’s deep integration within the social network, not to mention the fact that Spotify required new users to sign up with their Facebook accounts last September. The inforgraphic also says that U.S. Spotify users have spent more than 23.7 million hours using the new apps in its desktop client.
While consumers are seemingly winning with the service, what about the artists?
In another infographic we posted last week, Ditto Music shows that Spotify pays $0.0051 per free stream in the United States, $0.0078 per unlimited stream, and $0.0153 per premium stream (based on 2011 payouts). In relation to a standard $0.99 download on iTunes, it would take roughly 47 premium plays on Spotify to equate to the same amount of revenue earned from a $0.71 payout for a single $0.99 iTunes download.
While the debate of who’s actually “winning” with Spotify may not be resolved anytime soon, the Swedish streaming giant now claims a catalog of more than 18 million tracks and an active userbase of 20 million around the world, with three million paying users. Spotify has reportedly raised nearly $188 million in funding so far, and is said to be seeking a new round that could bring its value up to $3.5 billion.
See Spotify's one-year United States infographic below:
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Hisham Dahud is a Senior Analyst for Hypebot.com. Additionally, he is the head of Business Development for Fame House, LLC and an independent musician. Follow him on Twitter: @HishamDahud
i hate to beat a dead horse on this issue, but does no one recognize that spotify payments have gone up on a per play basis in markets like sweden and the uk? Is the per stream payment not fixed to the revenue received by spotify a la the way salary caps are fixed in pro sports?
at the every least, the increase in per stream payment in other markets deserves to be mentioned when you talk about the “low” per stream payment for spotify in the us.
just as a single example, the per stream pay out in sweden is something like seven or eight cents a track.
13 Billion songs divide by 3 million users is roughly 4,300 songs per year per person. This is 12 songs a day, or roughly one album of listening on average per day.
It all depends on usage. If that goes up per stream payment will go down, if it goes down, per stream payment will go up.
All of this arguing over per stream payment detracts from the issue of aggregate payment, and aggregate payment potential. That is where the math of streaming begins to possibly make sense.. at scale.
Spotify generated the majority of their revenue on predominately 600,000 users (20% of 3 million) if they pay out 70% that is 50 million dolalrs to be doled out.
Artists need to take their total revenue from spotify and multiply it by 37.5 which simulates revenue 22 million subscribers, which if spotify hit would put them on par with netflix in terms of subscribers.
After that they could multiply their current revenue by 160 as that would put spotify on par with pandora in terms of users.
That is how much money the service will generate at scale if the plays stay divided at the same ratio. Of course it is unlikely that the ratio will stay the same, there will most likely be a small amount big winners and a large amount of paltry payments.
There are many ways to do this, but the per stream payment is the worst indicator of future success. It is stuck in the compulsory payment model of thinking that the music industry has always operated in.
I don’t know if streaming will ever make sense for artists and rights holders financially, but I do know that the per stream payment is a red herring argument.
my math was wrong on the sweden pay out. i take it back.
One number I didn’t see here … the total amount paid out to artists/rights holders in the given period?
I find the app finder usage rates to be particularly surprising. It seems as though every Spotify user I have talked to is unaware that the apps page even exists.
A thoughtful insight and ideas I will use on my website. You\’ve obviously spent a lot of time on this. Thank you!
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