TechCrunch ran a story on Spotify a couple of days ago, where Daniel Ek had commented on some very interesting issues. Daniel Ek, Spotify CEO, spoke at SXSW and told in his keynote that, Spotify as a service consumes more bandwidth than the whole of Sweden (on certain days that is). Those wondering why Spotify is built in a P2P manner now fully understand the need for such a solution. Ek also commented that it’s a million dollar question why Apple remains to deliver all its digital downloads from a “single source” generating huge amounts of traffic that also need to be paid for.
On another note, Daniel Ek also commented on another interesting figure regarding Spotify’s subscriber base. He mentioned that Spotify now has some 7 million subscribers to the service of whom approximately 320 000 are paid subscribers. By the average price of the service (around 10€), Spotify is now generating revenues somewhere around the three million mark per month. This however does not mean the company is profitable as it is very much unknown how the revenues are paid onward to the copyright owners, ie. the record labels.
With about 320 000 paid subscribers from 7 million total user base, Spotify’s conversion to paid users is a nice 4,57%. This is a very interesting figure they can use in the negotiations with the US counterparts of the copyright owners as they are planning to open the service there. It seems that Spotify is well on its way to success, nevertheless the much debated payment rates to artists.