Spotify has reached the 10 million subscriber mark, an important milestone as it competes in the increasingly crowded streaming music market.
The new number, which Spotify announced in a blog post, is up from 6 million subscribers in March 2013.
In addition to the paid subscriptions, Spotify also announced 40 million active users, an important base for a company that relies on using free music to eventually convert listeners into subscribers. That number is up from 24 million, which was also announced in March 2013.
"We've had an amazing year, growing from 20 markets to 56 as people from around the world embrace streaming music. 10 million subscribers is an important milestone for both Spotify and the entire music industry," said Daniel Ek, Spotify CEO and founder, in a press release. "We’re widening our lead in the digital music space and will continue to focus on getting everyone in the world to listen to more music."
Those numbers are particularly encouraging for a company that has had to take on competitors like Deezer, Rdio and the startup Beats Music, which has struggled to attract a significant subscriber base and is rumored to be an acquisition target of Apple.
Pandora continues to lead the broader streaming market with 75.3 million users, although it operates on a different model with more emphasis on advertising. Pandora has only about 3.3 million paid subscribers.
Subscriber growth is key for Spotify if it is ever to turn a profit.Subscriber growth is key for Spotify if it is ever to turn a profit. The company has had no shortage of investor faith, raising more than $500 million in funding. It's a tough business — 70% of its revenue has been paid out in royalties, leaving some question if the company will ever make money.
That depends on converting its low-margin non-subscription listeners to paid subscribers. Spotify is more successful in Europe, having opened to the public in the United Kingdom in 2009 and in the U.S. in 2011.
Reports from the company are closely watched, as it is still a private company and therefore not required to disclose its financial reports publicly. That could change in as early as fall of this year if Spotify's rumored IPO plans go through.