Spotify U.S. Subscriber Base Not Growing As Expected

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Despite Spotify's growing numbers, it's not reeling in the expected paying customers.

Just after Spotify announced that it's extending the "free" service beyond the six-month limit, reports have surfaced that the digital music service has been under-delivering in terms of subscribers. This may be why the free period has been extended -- an attempt to reel in new potential subscribers and boost slacking revenue.

But Spotify's numbers say that 3 million U.S.-based users have signed up since June 2011, but only 20-percent are actually paying for a subscription. "People aren’t 100 percent happy," said one music-industry insider. "Spotify overpromised, but doesn’t everybody?"

The service has changed quite a bit since we provided a hands-on at launch. The desktop feature now supports apps provided by the likes of Last.fm, Rolling Stone, Tunewiki and more. The entire main page has been revamped to list trending playlists, top tracks among friends, top tracks and top playlists in your area. Spotify even provides radio stations of all genres including 80s, 90s, Heavy Metal, Pop and more.

Why paid users really haven't flocked to the new service is unknown. Spotify is even more Facebook friendly than it was at launch. But let's face it: there are similar if not better services on the market that don't charge for mobile listening like Slacker Radio which doesn't force users to download a desktop client. But with the extension of its free account, Spotify may finally be caving in to competition as did MOG.

"The question is, how sticky is Spotify? Is it able to hold on to users for more than a year?" one source said. "The free people are not signing up for a long period of time, or at the highest pricing tier, or they’re not renewing."

Are music subscription services worth the price? Is this a dying model that really never took off in the first place? Slacker Radio actually seems to be doing rather well, as the company reportedly expands its storage of around 60 TB every six to nine months, meaning its user base is increasing, with over 30 million listeners served each day.

Kevin Parrish

Kevin started taking PCs apart in the 90s when Quake was on the way and his PC lacked the required components. Since then, he’s loved all things PC-related and cool gadgets ranging from the New Nintendo 3DS to Android tablets. He is currently a contributor at Digital Trends, writing about everything from computers to how-to content on Windows and Macs to reviews of the latest laptops from HP, Dell, Lenovo, and more. 

27 Comments Comment from the forums
  • hfitch
    Am I the first. Well Slacker just works better. I rather listen to some ads and get the music I need for free. Thats why it works for me. Or pandora
    Reply
  • Murissokah
    People joined because it was free and somehow they are surprised there aren't many paying customers?
    Reply
  • Maybe because a lot of people left before they knew that free service would be extended. Including me...
    Reply
  • gm0n3y
    I hope that this business model doesn't die off. I'm sick of paying for every album/song that I want. I'm much more willing to pay $5/month to listen to everything. Of course Spotify isn't available here in Canada.
    Reply
  • Delengowski
    I'd be using spotify if it didn't require facebook login, but seeing as I don't have a facebook(or any social media for that) and will not make a bogus one just to be able to use spotify; I'll just stick to pirating.
    Reply
  • Middleman
    Who needs Spotify when I'm already a Pandora subscriber? If I wanted to listen to music I already own, I can download it to my phone. The biggest reason I pay for Pandora is to discover music I don't already own.
    Reply
  • Pawessum16
    I would pay for Spotify.......if I wasn't in college and had money. Even then, a Spotify subscription is only slightly compelling of a buy. Spotify would be even more compelling if it offered streaming of music in FLAC lossless (at least on the desktop), that certainly hasn't been done, and it would help bring in CD people and audiophiles. Plus, they need to get rid of the mac gui on Windows, it looks like crap (I have an allergy to shades of grey LOL), and it works like crap (snap, among other standard Win7 window behaviors don't work).
    Reply
  • jdog2pt0
    Viva la Pandora

    I'm a happy Pandora One subscriber. If I wanted to listen to listen to music I already have, oh wait, that's what I have my Zen for.
    Reply
  • aoneone
    why would anyone even bother? mp3s have been free since 1997. it just boggles the mind why these poor saps would cough up moolah.
    Reply
  • kittle
    ditto on Pandora (or pandora one). For $35 a year, i get unlimited music based on my own tastes, with new stuff added constantly.
    why get another service which I know only from marketing hype, and that will charge yet another subscription fee.

    If i want to listen to my own music on the go, I burn a CD
    Reply