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Spotify’s US performance has been less than rocking, according to sources who say the digital music service has been under-delivering in terms of subscribers.
It has been nine months since Spotify debuted in the US and was hailed as a coming music revolution, offering subscribers all-you-can music for up to $10 a month. Now, insiders close to the music labels say the revolution has not been all that was promised, with fewer people paying for subscriptions than expected.
To be sure, some of the fault lies with the record companies, which placed restrictions on the service that may have discouraged some users from joining.
Since last June, Spotify has signed up 3 million US subscribers. About 20 percent — or 600,000 — pay for the service, according to data obtained by The Post.
“People aren’t 100 percent happy,” said one music-industry insider. “Spotify overpromised, but doesn’t everybody?”
The majority of Spotify users sign up for the free model that gives users unlimited access to songs through desktop computers. After six months, the site limits users to 10 hours of music a month, and until last week users were only allowed to play individual songs up to five times a month.
That limit was lifted last week, a change that is viewed as critical to growing engagement.
The free model is meant to entice users into the paid tier, in which members have unrestricted access to music from PCs and mobile devices. The conversion rate from free to paid has been less than 20 percent.
“The question is, how sticky is Spotify? Is it able to hold on to users for more than a year?” one source said. “The free people are not signing up for a long period of time, or at the highest pricing tier, or they’re not renewing.”
Spotify’s strategy is to boost the free tier so that more people jump into the service. Lifting the limit of five plays per month for individual tracks allows free members to listen to the same song over and over during their 10 free hours.