Report claims Spotify making 14p per user from ads
The Register claims to have dug up some worrying figures on how much money Spotify is making in the UK from advertising. It says that Spotify is earning 14p per user per month from ads at the moment, generating £82k in ad revenues last month in the UK, despite having more than half a million registered users.
The article claims that “less than 17,000 people” are signed up to the Spotify premium service in the UK, which at £9.99 a month would mean another £170k of revenues.
The Register also claims that Spotify’s demographic is “around 40″, raising the spectre that so-called Fifty Quid Bloke, who used to regularly spend £50 on entertainment, is turning into “14p Man”. The Register doesn’t disclose the source of its figures, and at the time of writing, Spotify hasn’t responded.
One thing we would say is that if the figures are true, Spotify has already converted up to 3.4% of its UK users into paying premium customers. And that’s before it upgrades the premium version to CD-quality streams and launches the mobile applications.
So while you can look at this story as confirming that Spotify’s ad-supported model is flopping, you could just as easily say it’s doing better than expected at upselling to the premium model.
Tags: spotify
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