Spotify is taking over. The music streaming service will be seeing a huge boost in its revenue. Fortune magazine reported that Spotify saw a 53 percent increase in ad revenue year-over-year for the first quarter. The company hasn’t revealed how much the streaming service has made, but it’s estimated to be worth more than the U.S. music industry.
Spotify also plans to include other ways that advertisers can reach and attract music listeners. Listeners who use the free service listen to ads in between songs or can view ads on the desktop web player. Spotify currently has 45 million free listeners and 15 million subscribers who pay $9.99 per month for ad-free listening.
“Starting on May 1, brands will be able to target audience segments based on streams from Spotify’s 1.5 billion-plus playlists. This will help them deploy appropriate ads towards consumers looking to workout, chill etc.
In addition, Spotify says that brands can now target audience segments based on who they are (age & gender, geography, language), what they’re listening to (playlist, genre), and when and how they’re listening (time of day and by platform/device).”
Digital Music News reported that Spotify is now worth more than the U.S. music industry. Spotify’s valuation is at $8.4 billion, which was calculated by the Wall Street Journal. The U.S. music industry comes in at $6.972 billion. Spotify is also expected to close a deal which will bring $400 million of funding from Goldman Sachs and Abu Dhabi’s sovereign wealth fund, according to the report. This new deal will bring the service up to $8.4 billion valuation.
Spotify’s new valuation will also double that of competing streaming service Pandora, which is estimated to be around $3.5 billion valuation, according to the Business Insider. On April 20th, it was reported that Pandora and Spotify are No. 3 and No. 4 on the U.S. iPhone revenue charts. This news comes after the rumors that Spotify was looking to close a deal for $500 million in new venture funding.
Meanwhile, it’s been reported that Jay-Z’s Tidal streaming service is flopping. Two weeks after the new service launched, the app has already dropped out of the top 700 charts. Tidal’s CEO was also removed from his position in a “streamlining,” move. Spotify also surged in the iPad Top 40 download chart right after Tidal’s campaign made its way across social media.
Now Tidal is desperate to win over Spotify subscribers by announcing a new partnership that will allow rival music listeners to bring over their existing playlists. The partnership is with Soundiiz, which allows you to transfer your music from iTunes, Rdio, Soundcloud, Spotify, and Xbox Music. Soundiiz is in beta, according to the report, and users have already complained about its glitches.
It sounds like Tidal is still a work in progress. Still, music listeners don’t want to dish out $19.99 per month for high-quality music, even if it comes with exclusive content. Spotify does it right by offering a free service that already delivers high-quality music and by also offering a premium service that includes ad-free listening.