Spotify: We’re not stealing many iTunes customers

The debate around freemium music continues to rage this week – with more comments from Lucian Grainge regarding his distaste for “ad-funded, on-demand” content coming to light.

Meanwhile, Spotify is pointing to stats that suggest it’s not stealing very many customers from the leading paid-for platform, iTunes; and is instead mainly clawing back users of file-sharing torrent sites.

Jonathan Prince, Global VP of comms and public policy, has told MBW that just 12% of former iTunes users in the US are now Spotify users.

Getting a decent understanding of what this stat means is important: Prince is referring to 12% of iTunes deserters – those customers who no longer use Apple‘s download platform.

Consumers who continue to pay for music on iTunes while using concurrently using Spotify are not counted.

“The vast majority of former itunes users aren’t on spotify: they’re using free services with no path to monetisation.”

Jonathan prince, Spotify

Prince told MBW that 40% of the consumers Spotify has pinched from iTunes are paying premium subscribers; a higher figure than the 25% average of premium subscribers across all of Spotify’s active users. 

“The vast majority of our users are not coming from iTunes; they’re new – we’re bringing people into the paying ecosystem who haven’t been paying for music before,” said Prince.

“And the vast majority of former iTunes users aren’t on Spotify, they’re using free services without a path to monetisation.

“But the former iTunes users who have come to Spotify are paying more than other groups on average, which is good news for the music industry.”

Lucian Grainge told the audience at Code/Media in California last month that “ad-funded, on-demand music is not going to sustain the entire ecosystem of the creators as well as the investors”.

Spotify’s Daniel Ek has previously argued that without a free entry point for consumers, the industry cannot hope to recapture fans that it has ‘lost’ to piracy services.

The debate rumbles on.Music Business Worldwide

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