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.”