Spotify has announced this week they have reached another milestone in the development of the company and now have signed up 1 million paying subscribers on their music service across Europe.
Spotify is currently in the process of raising funding to help it break into the US market which has been a long a hard fight over the past few years. However with the signing of a number of US music companies Spotify now looks ready to make the jump in to the US market and make a splash.
Spotify’s profitability relies on them converting enough users from their user base into paying subscribers. The current 1 millions paying subscribers represents around 15 percent of its active users base which in total includes around 6.67m people. Just two years ago Spotify was celebrating reaching 2 millions users.
Spotify pays a levy to record labels and royalty collection services every time a track is played on their music service, which is harder to cover with income from advertising than it is with subscriptions.