Spotify, the streaming service launched in 2006 and based in Stockholm, has been growing steadily and is reported to be preparing to go public via a direct listing - sidestepping the IPO process.
Spotify uses a "freemium" businessmodel - a free version of the product includes ads played every few songs while a Premium version costs $9.99/month for a single user or $14.99 for a family.
We dug in to see how Spotify's business is looking.
Our consumer spending analytics application shows steady growth in the paid version of the product, captured in our panel of over 3 million US credit and debit cards, growing total revenue over 70% over two years:
We notice that in the last 12 months male customers spent more per customer than female customers, suggesting that female customers churn more quickly:
Compared to other popular streaming services, Spotify (red line below) enjoys strong customer retention, second only to Netflix and well above competitor music streaming services like Pandora (purple line) and Tidal (yellow line):
To see where Spotify has made the most progress in the US, we looked at metro areas ranked by number of paying customers per 1,000 panelists:
Coastal metro areas like New York City, Boston and LA have a high penetration of Spotify subscribers, but fast-growing, younger areas like San Antonio, Texas and Colorado Springs, Colorado show comparable market penetration.
It seems that Spotify has built a strong business so far, and with less than 10% market penetration even in its largest markets, there seems to be plenty of growth room for this soon-to-be public company.
Updated 8/9/2017: Removed an incorrect chart related to gender distribution of customers.
Learn more about consumer spending analytics with TXN.