According to reports by IFPI and some other data available, it seems that Spotify doubled its market share in 2011 as compared to 2010. And by market share we mean the global streaming music market as followed by International Federation of the Phonographic Industry (IFPI).
Also, according to public records the company had filed in the UK we can tell Spotify’s revenue was $99 million in 2010. Towards the end of 2010 they also shared that they had some 750 000 paying subscribers world wide. According to IFPI estimates, the global market for subscription services had about 8,2 millioin paying users. This yields Spotify a market share of around 9,1% in 2010.
In 2011, the company said it had around 2,5 million paying subscribers by the year end. The growth was mainly driven by its partnership in the US with Facebook. US is the biggest streaming services market and it gained a lot with that partnership. In 2011 the company added some 1,75 million paying users, which comes down to almost 150 000 new subscribers a month, evened out through out the year.
Last year the global market of paying subscribers had increased to 13,4 million. 2,5 million of those subscribers were using Spotify’s services and thus Spotify had a market share of around 18,7%.
We all know the company is growing rapidly, but comparing its growth to the overall growth of the market can give us an idea where it will go in the future. Spotify grew by just over 100% while the market grew at a rate of 63,4%. Essentially, the company’s subscriber base is growing at 1,5 times what the market is. If it has been able to take almost 20% of the global market for streaming services, it is bound to become the leading service provider in the industry in a few years.
Another interesting way to look at the growth is that Spotify doesn’t really look at the streaming services market as its competition, but defines piracy as the benchmark it wants to beat. Therefore the market has a lot of room to grow and in doing so, also adding substantially to Spotify’s revenues (and eventually bottom line).