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The hotly anticipated Spotify US launch has been a big boon to the company’s bottom line, bringing the company’s valuation to $1.1 billion.
Despite a stringent invite-only model for free users, the service has done fairly well on both the free and paid-subscription fronts among US subscribers. Earlier today, AllThings D noted that 1.4 million US users had clambered aboard in the early days for free subscriptions, and 175,000 had committed to paid subscriptions- up from 70,000 paid subscribers in the first week. (Spotify isn’t necessarily cheap, either, with paid plans clocking in at between $60-120 a year, roundabout depending on whether you want iPod, iPhone and Android access or not.)
In addition to the US launch, Spotify pulled in $78 million in funding over the summer. However, the US launch has been a pricey gamble for the company, costing a little over $98 million. And while success in the American market could well be mixed- Softpedia points out that US consumers are traditionally less apt to hop onboard to subscription services- features like high audio quality, a slick user interface and relative low cost compared to iTunes for Spotify users could entice more to come around to streaming music services on a paid basis.
Still, the jury’s out on whether US users will abandon services like Pandora and Grooveshark in droves to adopt the slightly different Spotify interface. Do you see a big future for Spotify on US shores? Are you likely to switch to it if you haven’t given it a spin already?
