A couple of weeks ago, we reported Spotify was cracking down on users who were pirating its premium service. It was an issue the company had long overlooked but was finally taking a step to eliminate
At the time, Spotify didn’t reveal an exact number of how many users were freeloading, but that number has finally been revealed: 2 million.
Up against its 157 million users (both paying and free) it’s a rather small number, but it’s still something to take serious. More to the fact that they were using Spotify’s Premium service, which starts off at $10. That’s roughly $20 million in revenue Spotify missed out on if you attribute the subscription fee to every free user. Yes, the number may have fluctuated somewhat with student discounts, family plans and whatnot, but even if it’s half that theoretical number, that’s still money Spotify has left on the table.
Interestingly, Spotify didn’t mind the money loss as much as it cared about how these pirates affected its metrics and performance indicators. It indicated so in its amended F1 filing with the SEC.
“Unauthorized access to our Service may cause us to mistake key performance indicators, which once discovered, corrected, and disclosed, could undermine investor confidence in the integrity of our key performance indicators and could cause our stock price to drop significantly,” Spotify said.
The previously mentioned 157 million active users was actually 159 million at the end of 2017 until Spotify updated its numbers to take into account the pirates. With Spotify filing to go public, these numbers matter more than ever.