July 31, 2012 at 2:08 pm
by Eliot Van Buskirk

Spotify Hits 4 Million Paying Customers… But How Many People Really Use It?

spotify facebook active users

According to Facebook, Spotify has at least 25.8 million monthly users. According to Spotify, it only has 15 million users. What's up with that?

This morning, as we reported on the launch of free Spotify Radio for Android, a company spokesman told us about some more good news for the company: It has reached four million paying subscribers. And you thought nobody paid for music anymore.

Spotify chief content officer Ken Parks announced that impressive figure at London’s Global Business Summit on Creative Content, as well as another equally important number: that Spotify now has over 15 million “active users,” as noted by The Next Web and others.

However, a simple Facebook search for “Spotify” reveals a completely different number. According to Facebook (see image to the right), nearly 26 million people use Spotify every month. This isn’t the first time we’ve noticed a discrepancy — it’s just a more egregious one. Either Facebook or Spotify, close partners with at least one common investor in Sean Parker, has its numbers wrong. Or else they’re using different measurements.

A Spotify spokesman has yet to respond to our inquiry.

The number of people who use Spotify is an important figure, because the so-called “conversion ratio” of paying to non-paying Spotify users affects Spotify’s payouts to labels. Those, in turn, affect Spotify’s ability to ink or renew deals labels, publishers, artists and songwriters.

If the conversion ratio drops too low, the music will start to disappear, and marquee artists like the Beatles and Led Zeppelin would likely continue to go missing from the service, in turn affecting its ability to draw new users and compete with YouTube and bit torrent.

If Spotify’s numbers are accurate, its conversion ratio (between paying and overall users) is a remarkable 27 percent.

If Facebook’s number is accurate, Spotify’s conversion ratio drops to 16 percent — still good, but not as impressive.

Why are these figures so different? Could Spotify be counting “active users” as people who stream at least a certain number of songs or hours per month, or who use the service continuously from month to month, whereas Facebook only cares that a certain number of people use Spotify at least once per month even if they don’t stick with it, or even if they only listen to a handful of songs?

That seems possible. Still, it’s a little awkward when a company announces “15 million active users,” while its biggest partner clearly lists “25.8 million monthly users.”

  • http://twitter.com/timmitchell Tim Mitchell

    i think, as you said, its a measurement difference, and when it comes to a service, a unique user count can differ based up on the company’s goal in using the metric. One guess would be that Facebook counts at least one login to the app in a month, whereas Spotify, by qualifying “active users” (which is probably also qualified in their deals, means a certain minimum usage based on time streamed, songs streamed, etc. Just a guess, but “active users” typically implies some “user must do something” threshold.

  • http://alishaoutridge.com/ Alisha Outridge

    This is an old post but I get asked about the discrepancy between active user #s on Facebook & the # reported by companies pretty often.

    Facebook measures & defines “active users” differently than the companies themselves do.

    If a company has users log-in exclusively using Facebook Connect then every time a user logs in appears to increase the product’s MAU. It’s also suspected that how “social” the users are on Facebook is also taken into account in Facebook active user #s so that indirect users who comment/share using that app are considered “users” too.