Spotify Marches On

Spotify Marches On

Two months ago, Rock Around The Web predicted:

Spotify will come out of the Taylor Swift imbroglio with MORE subscribers.

Now the numbers are out and Spotify not only grew, it grew faster than ever.

Spotify says 60 million people are using its service worldwide as of year-end. 15 million pay for it.

In the 7 months since May, when Spotify reported 40 million users and 10 million paying subscribers, both the number of users and the number of paying subscribers rose 50%. From the start of November until the end of December, each number is up 25% in just 2 months.

Yes, you read that right. Taylor Swift hit Spotify with her best shot and Spotify surged 25%.

In typical fashion, Spotify thanked its users for its best-ever numbers:

We had an amazing 2014 at Spotify and owe it all to you, the music fans who listen, discover, share and celebrate music and artists with us every day of the year.

There’s more to the story.

What Went Right?

Taylor SwiftOne theory attributes Spotify’s gains to Taylor Swift. When she yanked her music from Spotify last November, the theory says, people who did not know about the service began asking, “What’s Spotify?” When they found out it lets you listen to gazillions of songs, they signed up.

That’s why Digital Music News greeted Spotify’s news with the headline:

Taylor Swift Created the Biggest Subscriber Gain In Spotify’s History.

But does Taylor Swift really deserve all the credit? Doesn’t Spotify itself deserve some credit?

Late last year, Spotify launched a series of moves designed to fortify its position as the #1 streaming music service. Some moves, like integration into the Shazam app and partnerships with BMW and Uber to get Spotify in more cars, were aimed at the future. Others were aimed at boosting subscriptions right away.

At the end of October, Spotify started allowing up to five family members to pay $5 per month, instead of the usual $10, to subscribe to ad-free Spotify Premium. Then, in early December, Spotify offered newbies 3 months of Spotify Premium for 99¢.

Not surprisingly, by reducing the cost of subscribing, Spotify picked up more subscribers. There is a connection between Spotify’s big numbers and Spotify’s big discounts.

But Spotify has offered discounts, even 3 months for 99¢, before. Discounts are working so much better now because a basic trend is behind them.

It’s not just discounted subscriptions. It’s not just Taylor Swift. What’s driving Spotify’s best-ever numbers is something bigger, something more fundamental.

Streams Up, Sales Down

Sometimes the simplest explanation says it best. Spotify is up big-time because music streams are up big-time. And the #1 place for music streams is Spotify.

Last year, according to Nielsen SoundScan, US music streams rose a whopping 54%. Paid downloads of albums dropped 9%. Paid downloads of songs dropped 12%.

The year in a nutshell: streams up, sales down.

Nielsen SoundScan says people accessed over 164 billion music streams last year. That’s remarkable in itself. But if you look back at the mid-year total of a bit over 70 billion music streams, you see something even more remarkable.

Consumers streamed about 24 billion MORE songs in the second half of 2014 than they did in the first half.

The 24 billion leap is huge. People are not just checking out streaming by dipping a toe in the water. They are all-in and loving it.

Streaming music is gaining more and more converts. And, right now, Spotify is the top place to find it.

What’s behind Spotify’s surge to 15 million paying subscribers is the primary trend away from ownership and toward easy access. Spotify is riding this primary trend. It’s a trend that nobody, not even an artist with the nation’s top-selling album, can stop.

Will Spotify stay at #1? Will it even remain an independent company? Who knows? What we do know is that Spotify, and all streaming music, is on a roll.

Like it or not, Spotify’s time has come.

The Streaming Music Revolution is going mainstream.

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