Spotify Paid Subscriber Growth Much Lower Than Expected

It has been 9 months since Spotify, the music streaming service landed in the US but Spotify has found it hard to get a good track of paying users. The term good is relative to what was expected with Spotify services according to several reports.  From June 2011, 3 million US subscribers have signed on but only about 20% of them are paying to use the service. The reason why the ratio of paid to unpaid customers is so low is because the majority of users signed up for the free version which offered them unlimited music access to music for six months.

The only limitations that were put in place were the 10 hours of music a month and no more than 5 plays per song. Spotify recently extended the free-listening period indefinitely and lifted the ‘5 plays’ per song’ limit in order to get more people on board with the service. While the offer is attractive, it does not seem to be getting people to pay for anything which defeat the purpose from a developer’s point of view. Reportedly, the free members are not signing on for a long time and the people at the highest paid membership tier don’t seem to be renewing. Are you a member of Spotify? What is your take on this matter? Let us know with a comment below.