Agency: In house
In its first several years of rapid expansion, Spotify saw remarkable growth as we introduced our service to millions of music fans across the globe.
The global music industry had seen a 40% drop in revenue between 1999 and 2014. But as Spotify's access model gained traction, that trend began to turn around. In 2015, global recorded music revenues finally grew 3% from the prior year.1 Things were looking up.
Turns out, that was the easy part.
2016 was a year of new challenges for Spotify. In a troubling departure from our steady growth curve of years past, by the end of 2015, our acquisition of new free users began to stagnate.
While that might sound like an isolated issue, it was a negative trend with ripple effects across the entirety of the Spotify business. In general, the majority of new Spotify Premium users are existing free users who decided to upgrade. So fewer free users meant a slowdown in new Premium users, too.