Spotify just announced a major milestone in the quietest way possible. Daniel Ek, the company’s founder and CEO, tweeted Monday morning that his streaming music service now has 30 million paying subscribers.
— Daniel Ek (@eldsjal) March 21, 2016
Spotify’s leap from 20 million subscribers to 30 million happened faster than any of its other previous jumps. After taking nearly two years to move from 5 million subscribers to 10 million, it took 13 months to get from 10 million to 20 million. This leap took just nine months, and it bears out a statement Ek made last summer, when he told an audience at a telecommunications conference in Canada that the arrival of Apple Music, which many industry observers expected would serve as Spotify’s stiffest competition, was actually making his service stronger. “We keep setting new records week by week,” Ek said.
Spotify had announced previous user growth milestones on its company blog. The expectation among music industry observers had been that the next time it published one of those posts, it would announce not just that it had acquired 30 million monthly paying subscribers but more than 100 million. Spotify executives began intimating they were closing in on that number in late September during presentations made to advertisers in New York.
At this point, questions about Spotify’s ability to appeal to mainstream music consumers, or the merits of its ad-supported tier, appear to have been answered. What remains to be seen is when the company will be able to get itself into the black. Last year, the company’s annual revenue exceeded $1 billion for the first time, but it also failed to turn a profit. The company cited investments in product development and an increase in staffing for its overall loss of $185 million.
When and how it answers that all-important question is of interest to a large number of stakeholders, including the record industry's major labels and a number of venture capitalists. Since launching in 2008, Spotify has raised more than $1.1 billion in venture capital, and in January, reports surfaced that it was seeking an additional $500 million in debt financing. The company is currently valued at $8.4 billion.