Spotify Hits 20 Million Paid Users
July 27, 2015

Despite Taylor Swift and Jay Z’s best efforts, millions of new users are embracing Spotify. Based on recent reports, more artists could soon follow suit. But is Spotify’s rise based on fantasy or fact?

Fact: The mammoth music-streaming service just announced that its 10 million paid subscribers (who took six years to accrue) doubled in a little less than a year: it can now boast 20 million paying users and 75 million non-paying users all over the globe.

That means the pool of paying users has not only grown, but has mushroomed at a far faster rate than non-paying users – one new paid subscriber every three seconds.

Fantasy or Fact: An upswing in the paid-user bell curve could translate into more moola for artists.

Hard to say. To date, Spotify reports having paid out over $3 billion in royalties, $300 million of which was paid out in the first quarter of this year. They claim they don’t plan on their royalty payouts slowing down. Spotify even projects its annual payouts to nearly double in 2016.

spotify projections 1 spotify projections 2Fact: Spotify made out with $526 million in venture capital funding at this year’s Worldwide Developers Conference (a record-breaking sum for the event).

However, serious questions remain on how Spotify will use its fresh VC funds: to seed further growth, or buttress its business’s still-questionable solvency.

And while Spotify certainly paints a pretty picture, will it honestly put its money really where its mouth is and pay out more to its artists? Up until now, Spotify has paid artists a pittance, forcing artists (like Taylor Swift, Jay Z, and Björk) to take matters into their own hands.

Even the U.S. Copyright office is likely skeptical of Spotify’s promise of bigger artist payouts, given their comments last Spring:

“The United States has the most innovative and influential music culture in the world, but our system for enabling the paid use of music—and ensuring compensation for its creators—lags far behind.”

We know it’s possible for streaming artists to be paid fairly. And who knows? Maybe Spotify will actually come through (it’s a nice fantasy).

Until that day comes, much as we all love a good fairy tale, it’s best not to hold our breath.

Leave a Reply