Music service Spotify is launching its free unlimited streaming platform on Android.
In a setup that is very similar to Pandora, users are able to create their own ‘radio stations’ and then listen to a constant stream of tunes. They cannot, however, choose specific songs to stream. It’s like tuning into the radio as opposed to hunting down your favorite songs on iTunes.
If you’re on Facebook (at some point we’ll be able to stop using the word “If” in that sentence) then you’ve no doubt seen friends sharing what they’re listening to on Spotify.
The popular streaming platform has garnered quite a following, but the company behind it has struggled to monetize that success.
Despite the millions and millions of registered Spotify users, only 600,000 have signed up for its premium service as per publicly disclosed numbers from a few months ago.
By comparison, Rhapsody, which is very rarely showered with sparkling good news and incredible valuation estimates, has more than 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.
For now, it’s relying a lot on advertising revenue from companies who pay for commercials that are piped into the streams of non-paying users. But it’s with the premium service that it really makes its biggest margins.
