Spotify’s bet for short-term growth pays off

Spotify now has 60 million active users, and 15 million of those are actually paying users, according to a post on Spotify’s blog. The announcement comes just two months after the company revealed it had 12.5 million paying users, which means it grew around 17 percent in just two months.

That’s impressive, but also no accident: [company]Spotify[/company] launched a deeply subsidized promotion in early December, offering consumers three months of music for just $1. That price obviously helped to convince a lot of people to sign up — but as I noted back then, it was also designed to boost Spotify’s numbers in another way.

Spotify usually lets consumers try its paid service for free for a month. The downside of that approach is that the company can’t account for trial users as paying customers until the second month, when credit cards actually get charged. And had the company decided to give its users three free months, then it wouldn’t have been able to account for them until March at the earliest.

The promotion it unveiled in December on the other hand had users paying on day one, even if it was just one dollar. That means it was able to grow its paid user base a lot in a very short time frame — which matters for a company that tries to raise more money, or even go public.