Spotify boss reveals subscriber numbers and plans to become a social network
Spotify boss Daniel Ek has revealed a new social direction for the music-streaming service, despite the fact that the number of paying subscribers remains low
Interviewed before an audience of entrepreneurs and start-up types by Virginia Eastman off of Working Lunch, at an event organised by Glasshouse London, the accordion-playing Swede revealed a new social direction for Spotify and discussed the company's gestation period.
The plan, when the company was founded in 2006, was to broker deals with record labels in six months -- it ultimately took two and a half years. Despite this, Ek says he was "never in doubt that we could build a better product than piracy." He dismisses suggestions that iTunes and record labels are Spotify's competition, stating that "our competition is piracy".
Although he wouldn't be drawn on precise numbers, Ek disclosed that the percentage of Spotify users signed up for a premium subscription is "not in the double digits". Although more than 90 per cent of users don't pay anything to use the service, Ek argues there are now so many users in total that "the numbers work".
Ek remained cagey about specific figures, circumventing Crave's question about how much of our subscription money finds its way into the artist's pocket. In the long-term, he plans for Spotify's turnover to be a roughly 50/50 split between subscription and advertising income. He revealed that revenue is currently doubling every two months, and the company could have been cash-positive early on but the decision was made to grow the service instead.
Ek hinted at a number of future directions for Spotify, including different price points subsidised by partners, with O2 mentioned as an example. He also revealed plans for a more social direction, including the option to share playlists with friends and post status messages. The platform will be opened up to artists to learn more about who is listening to their music, with aggregators helping Spotify add more unsigned bands.