Mystery surrounds exactly how many of Spotify’s six million users are paying subscribers, but one exec says its business model is simple…
Speaking at the Noah conference in London on Monday, Shakil Khan said: “Whilst I can’t go into specifics, overall we would expect 50 percent of our revenues would be generated from subscriptions and 50 percent would be generated from advertising.”
So, that’s clear — though how much money artists and record labels receive in rights payments for the tracks is less transparent.
Alongside Creandum and Northzone, and then Wellington, Li Ka-Shing and Klaus Hommels, Khan revealed he is a Spotify investor, too.
– Foreign goals: Khan is also heavily involved in the company’s other key strategy: foreign expansion. He says the delayed US launch is on course for Q110 or Q210, a Chinese service should be online in same timeframe and Germany is shaping up to be Spotify’s seventh European market with a launch in the “early part of 2010″. Echoing CEO Daniel Ek’s enthusiasm for China, Khan appears especially excited about launching there: “In China the number one online activity, before search and email, is entertainment. And no one buys music there.”
– New device push: Having pushed its paid-for music streaming platform onto mobile handsets and ISPs, Khan repeated the CEO Daniel Ek’s aims to launch premium services on more platforms in 2010 and said that talks are ongoing with Korean TV makers to add an on-demand, online connection to TV sets. Khan added that he gets “one call a week” from games console makers wanting to add Spotify to their suite of online services.
– Some Spotify stats: Khan is full of stats to show off how successful the company has been since its 2006 inception: the UK is the biggest market with just over three million users, followed by Sweden; the average time users spend on the service a day is 94 minutes — that’s compared to a normal music service average of 10 to 20 minutes and more than the 72 daily minutes Ek said users consumed in October. That final stat shows people are “basically using this as a replacement for their traditional music system”, says Khan.
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