Does this mean the end of freemium?įreemium proved highly valuable to Spotify in its earlier years and continues to be an important entry strategy for new markets. So price promos are converting at more than double the rate of freemium. Meanwhile Spotify’s total user base is 100 million which means the free-to-paid ratio is 37%.

That might sound high but it actually represents a 79% conversion ratio, which is a stellar rate by anyone’s standards. According to Music Business Worldwide, 4 million of Spotify’s newly acquired 7 million subscribers were on promotional offers and around 1.5 million of those are expected to churn out when their promotional period ends. Which is another way of saying that 9.99 just isn’t a mainstream price point.Īs the IFPI’s 2015 numbers revealed, the average label revenue per music subscriber fell globally from $3.16 in 2014 to $2.80 in 2015, with price discounting a key factor. In short, 9.99 needs to stop being 9.99 in order to appeal to consumers. Which itself comes on the back of similar offers having supercharged Spotify’s subscriber growth for the last 18 months or so. But there is a more important story here: Spotify’s accelerated growth in Q2 2016 was driven by widespread use of its $0.99 for 3 months promotional offer. It is beginning to look suspiciously like a 2 horse race. It also means that Spotify is now nearly 10 times bigger than Tidal and probably Deezer (which hasn’t reported numbers since its France Telecom bundle partnership ended). ‘Leaked’ Spotify numbers emerged today indicating that the streaming service has just hit 37 million subscribers, which puts more clear water between it and and second placed Apple Music, despite the latter’s recent growth.

Spotify 3 months for 9.99