Spotify premium service fails to deliver

Apr 5, 2012
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If you were a fly on the wall at Spotify's office, you might be hearing a lot of murmuring about how to improve the company's premium music streaming service, which isn't performing up to expectations. The New York Post wasn't a fly on the wall, but it did manage to get some behind-closed-doors comments from an unnamed source at the social music pioneer. And the comments aren't very positive.

"People aren’t 100 percent happy. Spotify overpromised," the Post quoted the source as saying. Apparently the number of people who have signed up for the premium version of Spotify, which requires a monthly fee, is far less than what the company expected to, and now it has to answer to the various parties that it revealed those expectations to. Approximately 600,000 people are paying for Spotify in the US today.

By comparison, Rhapsody, which is very rarely showered with sparkling good news and incredible valuation estimates, has one million paid subscribers in the US. And that service is even more expensive than Spotify. Spotify thought that by reducing the amount of music users could listen to for free, more of them would sign up for a premium account. That plan just isn't working. The site has 3 million paid subscribers around the world, but given the size and importance of the US market, it should be able to boost that up significantly if it could play its cards right.

[via NY Post]


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