Is Spotify Unstoppable?

Is Spotify Unstoppable?

It's certainly pervasive

Spotify announced this week that it has over 15 million paying customers out of a total user base of 60 million, making it one of the most popular and most successful streaming music service in the world. But it's unlikely that Spotify will ever achieve the level of success of previous-generation music services like iTunes, if only because there's much more high quality competition now.

Spotify revealed the new milestone in a short thank-you blog post, and these new figures update the firm's previous milestone—10 million paid subscribers and 40 million active users—from last May. Thus, it has more added 5 million paying customers, and 20 million active users overall, in just seven months. This service isn't just growing quickly, it's exploding.

Spotify competes in a crowded market that includes services such as Beats Music and Xbox Music, and some might consider Internet radio services such as Pandora and iTunes Radio as competition too. Pandora has over 76 million active users, for example, and supposedly has over 200 million users in all. But that service isn't as full-featured as Spotify, and Pandora hasn't been able to monetize its service like Spotify has.

(By comparison, the satellite radio service Sirius XM has just over 27.3 million paying subscribers.)

That Spotify's growth comes at a time when the music industry is starting to push back against the relatively low royalty rates paid out by subscription services. (It also comes during a time in which Taylor Swift pulled her music from the service over said rates. Apparently, she doesn't make enough money.) Spotify argues that it pays more music royalties than any other service and has paid over $2 billion in royalties since 2008.

Spotify's quick rise to the top means trouble for competing services. Apple is allegedly working to integrate Beats Audio into its OS platforms and, presumably, into iTunes too. And Microsoft's Xbox Music is the service no one has even heard of, let alone used. Which is too bad: Beats and Xbox Music are both in fact excellent services, and their mobile apps are superior on Windows Phone to Spotify (which lacks key features found on other mobile platforms for some reason).

If you are a Spotify subscriber, be sure to check out their new 15 Million Thank Yous playlist, which is of course full of celebratory music. 

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