Spotify Hits 20M Paid Users, Defends Artist Payouts

Josh WolfordBusiness

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Spotify has a message for Apple and its new Apple Music venture – you're starting well in the hole.

The streaming music company has just announced it has hit 20 million paid subscribers, and 75 million total active users (meaning 55 million free tier users).

Year-over-year, that's a 100 percent increase in paid users. In May of 2014, Spotify reported 10 million paid subscribers and 40 million total active users. In January, those numbers were 15 million and 60 million, respectively.

The new figures mean something significant for Spotify – it's the first time the ratio of paid subs vs total subs has increased in about two years.

In a blog post, Spotify also pushed back at claims that it's bad for artists. According to the company, it paid out over $300 million in royalties in the first three months of 2015.

"More people listening on Spotify means more payouts to the creators of the music you love. As we grow, the amount of royalties we pay out to artists, songwriters and rights holders continues to climb faster than ever. We have now paid more than $3 billion USD in royalties, including more than $300 million in the first three months of 2015 alone. That’s good for music, good for music fans … and good for music makers," says the company.

Some would disagree.

Still, Spotify says that payouts will dramatically increase over the next year – given its uptick in paid subscribers.

Spotify has also closed a new round of funding that will put $526 million into its pockets, according to the Wall Street Journal. This will surely help the company battle the newly-announced Apple Music.

Apple Music may have already forced Spotify's hand a bit.

While subscriber growth – especially the paid kind – is wonderful for Spotify, it's not all sunshine and roses. As Peter Kafka at Re/code points out, "the flip side of Spotify’s user growth is that its losses continue to increase. The company says that in 2014 it lost $197 million, up 289 percent from a $68 million loss in 2013. In the same period, Spotify’s revenue was up 45 percent, to $1.3 billion."

Image via Spotify, Facebook

Josh Wolford
Josh Wolford is a writer for WebProNews. He likes beer, Japanese food, and movies that make him feel weird afterward. Mostly beer. Follow him on Twitter: @joshgwolf Instagram: @joshgwolf Google+: Joshua Wolford StumbleUpon: joshgwolf