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Spotify hits one million paying customers

Music streaming service Spotify has announced a major milestone: it now has more than one million customers paying for its service, proving that a 'freemium' model really can work.

For those who haven't come across the service yet, Spotify offers on-demand music streaming with visual and auditory advertising which can be removed for a small monthly fee. That fee also enables offline access to downloaded music and access via smartphone apps for on-the-go listening.

Spotify hit the one million active users mark two years ago, but this latest achievement is a very different animal: rather than one million users overall, Spotify boasts one million users paying either £5 or £10 each month to remove adverts and enable offline and mobile access to the massive selection of music on offer.

The company, which has been valued at $1 billion, claims that this represents 15 per cent of its overall userbase - proving that if you give users what they want, in the form of on-demand access to music with a minimum of fuss, they're more than willing to stick their hands in their pockets for the extras.

"It’s a testament to our fantastic users who continue to support us and spread the Spotify word," claimed company founder Daniel Ek, "either by telling friends or sharing some of the 200 million playlists that you’ve put together so far.

"We’ll continue to focus on providing you with the best music service possible, and look forward to adding even more cool new features over the coming months."

With Spotify currently finishing up the deals required to launch in the US, it's a company that appears to be going from strength to strength at a time when the music industry as a whole is complaining of dropping revenue and the costs of piracy.