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A big milestone reached today for the music streaming service Spotify. It now has one million paying subscribers, according to a blog post from CEO and co-founder Daniel Ek.
A U.S. launch could also be one reason behind Spotify releasing these numbers today. Rhapsody, another music streaming service, last week announced that it would be extending its free trial offerings to 60 days from its original 14-day period. Some have conjectured that Rhapsody’s longer trial was to attract more users, and potentially lock them in, ahead of a Spotify launch in the U.S.
Before Spotify announced its one million mark today, both companies had reported 750,000 paid subscribers – in Spotify’s case, that was out of 10 million total users, though it did not update its total users count with today’s new figure.
What’s not clear is how those subscribers currently break down. The service today offers three options for use: a £9.99 ($16) per month subscription for a premium service that includes mobile and offline access to music; a £4.99 ($8) per month subscription for an ad-free desktop version of the service; and a free, ad-supported version.
Nor does it necessarily point to profitability: Music Ally reports that in October Spotify told it that in the first eight months of 2010 it paid out €30 million ($41.8 million) to music rightsholders.
In its last set of accounts in the UK (which do not include operations in Sweden and other countries), for 2009, Spotify reported revenues of £11.32 million ($18 million) and a net loss of £16.66 million ($27 million). This was still a startup year for the company, thought, which started its service in October 2008. Spotify has yet to post 2010 accounts, which should show much higher revenues.
In any event, reaching a million users means Spotify is one of the world’s bigger music subscription services, and has so far fared a better fate than some like Thumbplay, which, in an apparent cash crunch, sold its music service to Clear Channel (OTCBB: CCMO), a deal we were the first to report last week.
Spotify has yet to extend its service to the U.S., although a reportedly recent $100 million funding round (Skype has never confirmed it directly) — with $50 million coming from Russia’s DST and $50 million coming from Kleiner Perkins Caulfied & Byers — may be pointing to a Yankee launch just around the corner.
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