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Successful ANZ Spotify Launch Driven by Facebook, Smartphones

|Feb 24|magazine7 min read

Subscription music streaming service Spotify announced that its launches in Australia and New Zealand last May were its two most successful in the company’s five year history.

At an Innovation Bay breakfast over the weekend, Kate Vale, the Swedish company’s managing director of Australia and New Zealand, said that Australia’s high smartphone penetration rate, as well as Spotify’s partnership with Facebook, has spearheaded the effort.

“When those three things go together in a market, Spotify seems to do very well,” Ms Vale told Computerworld Australia.

While specific numbers were not disclosed, Ms Vale said the success of each launch was quantified by taking the percentage of the nation’s population subscribed to a Spotify service and the number of users paying for the premium service (which allows the user to access Spotify from any computer, tablet or smartphone – online or offline – and enjoy exclusive content, enhanced sound quality, etc. for $11.99/month.)

ANZ, Ms Vale said, has accumulated the highest percentage of users on premium memberships less than a year after Spotify’s launch.

To further accommodate its listeners, Spotify is rumoured to be meeting with major record labels “to ask for substantial price breaks from the music labels as well as the rights to extend its free pricing tier to mobile devices,” The Verge reported.

Currently, 70 per cent of Spotify’s revenue is paid back to the labels as licensing fees.

When questioned about attributing some of Spotify’s success Down Under to Apple’s history of song price discrepancies on iTunes, Ms Vale affirmed that Spotify and iTunes tend to attract different users.

Financial woes aside, international adoption of the service has reportedly influenced artists to alter their tour schedules:

“We has an artist in our Stockholm office just recently who sat down with our CEO, Daniel Ek, and we basically showed them a heat map of everywhere in the world that people on Spotify are listening to their recent album,” Ms Vale said.

“It actually really surprised them and they changed all their tour dates and tour places to accommodate where they were being heard.”