Spotify Vs. Rhapsody By The Numbers

Spotify's Daniel Ek And Martin Lorentzon

Spotify has doubled the apparent success of its freemium model by changing the way it reports one number.

— Until today, Spotify was claiming 750,000 paying subscribers amongst 10 million total users – a 7.5 percent premium conversion.

— Today, though, it declared a million paying subscribers and said this instead was 15 percent of its active users within the last 30 days – a group it didn’t initially put a number on this morning but which, talking with paidContent:UK later, it explained is nearly seven million.

Picking the active user count on which to judge its paying base, rather than the total, inflates the apparent success Spotify is having converting free, advertising-exposed listeners in to customers – something U.S. labels prefer.

Spotify’s new seven-figure number, built up in its seven European and Scandinavian countries, is likely aimed at portraying itself as more popular than North America-only Rhapsody, as it moves closer to a launch in Rhapsody’s back yard…

Just like Spotify, Rhapsody’s last publicly-disclosed user count was 750,000 – a number it’s sticking to for now. Asked by paidContent:UK today, the company didn’t disclose an updated figure and tried to gloss the previous one.

750,000 subs is our latest figure, which makes us the largest player in the U.S. by a long way,” a spokesperson said. “It’s growing every day and we expect to release new figures shortly. Based on figures we have seen, we comprise more than half of the market and consumers love our service and our apps.”

Spotify’s one-upmanship gives it a sort of upper hand, as it looks to win its final major-label deals before U.S. launch – it suggests Spotify can sign more subscribers than Rhapsody despite (or, probably because of its majority-free model). But a pissing contest doesn’t necessarily help win contracts. And Rhapsody has built its paid-up base without the lure of a free taster like Spotify’s.

Meanwhile, Spotify’s declaration also allows us to make an interesting further observation about the service’s stickiness, beyond simply the freemium conversion rate. We estimate the total of active and inactive users has now risen to about 13 million. In which case…

— [Glass half-full]: About half of people who have ever tried Spotify (the active base as a proportion of the total base) liked it enough to continue doing so.

— [Glass half-empty]: About half of those who have ever tried Spotify haven’t done so in the last 30 days. Where have they gone?

What offerings would your ideal music streaming service have? Are any of the leading platforms — like Spotify, for example — up to par with your needs? Join the discussion on Facebook

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