![]() Imagine the Government Levying a 70% Tax on Every Dollar You Made Yet, even though Spotify is estimated to balloon to almost a billion dollars in revenue this year, they face two seemingly insurmountable problems: the music industry and our generation's perception of music. This all sounds amazing, right? Any other SaaS company would kill for those kind of unit economics. That seems ok, but here’s where it all goes down hill Fortunately for Spotify their conversion numbers are pretty stellar with 25% (or 6 million) of free users converting to paid plans. Users can also pay to eliminate the ads for $4.99/month and then to eliminate the ads and stream music on any and all devices (even offline) for $9.99/month. Remember though, freemium is a marketing strategy, not a revenue model.įor revenue, Spotify’s free users can stream unlimited music on their desktop, but need to listen to ads every once in awhile, providing our Swedish bards with a small revenue stream (about 15% of their total revenue). We’ve all seen these before, but essentially an enormous bevy of free users are subsidized by a small proportion that end up paying for some sort of premium plan. Spotify’s marketing strategy hinges upon the freemium play. In order to truly unpack the problem, let's take a quick review of their business model. Freemium is only as good as the revenue model to back it up Let’s explore Spotify’s revenue model a bit more, discover where the numbers show they’re failing miserably, before digging into where Spotify (and you) can turn these mistakes around because the last thing this music fanatic wants is to see Spotify go the way of the Dodo. That’s a big statement, but fortunately we can prove it with some good old fashioned evidence. Instead, Spotify is being crushed under their own weight by the makeup of their pricing and revenue model that is simple, but awful for their bottom line. Not even new competitive entrants like Google, Twitter, and Apple lead to Spotify failing. In fact, they’re actually playing directly into what we want in a music service. Yet, Spotify's current marathon is not hinged upon changing consumer’s behavior in mass like an Amazon. Hell, Amazon did billions of dollars in sales last year, and still came up with a loss. Sure, tons of companies go into the red in defense of growth, even at the eight or nine figure mark. market seemed like a smashing success, but despite the significant growth, Spotify reported a net loss of $57 million due to $293 million in expenses. Williams (feat.During 2011, digital music service Spotify doubled their paying customers to more than six million and earned a whopping $236 million. Curren$y, Freddie Gibbs & The Alchemist- Saturday Night Special 50. ![]() ![]() ![]() Devin the Dudde, Curren$y & Killa Kyleon) 47. Curren$y, Freddie Gibbs & The Alchemist- Now & Later Gators 46. T.I., Dave East, Tee Grizzley, Royce Da 5'9'’, Curren$y, Shelley FKA DRAM, Snoop Dogg, Fabolous, Rick Ross, Chamillionaire, G-Eazy, Styles P, E-40, Mark Morrison & Gary Clark Jr.) 45. Curren$y, Freddie Gibbs & The Alchemist- Location Remote 42. Curren$y & Harry Fraud- Gold and Chrome 40. Curren$y, Freddie Gibbs & The Alchemist- Willie Lloyd 36. Curren$y, Trademark Da Skydiver & Young Roddy- Plan of Attack 32. Curren$y & Harry Fraud- Sixty-Seven Turbo Jet 23. Larry June & Harry Fraud- Sunday Morning Drive (feat. Curren$y, Freddie Gibbs & The Alchemist- New Thangs 14. Smoke DZA, Wiz Khalifa & Curren$y- Santos Party House (feat. Shoreline Mafia, OHGEESY & Fenix Flexin- Chandelier (feat. Wiz Khalifa & Curren$y- Getting Loose (feat.
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