What is the monthly revenue Spotify makes from Spotify Premium?
Spotify all over the world or in US alone? US alone
Spotify Active Users
Spotify Paid Users
Premium Subscription $$
Estimating the numbers
Spotify Active users = ? Do not know, let us assume and arrive at it
Spotify Active users = 300 * 0.6 * 0.5 = 90 million
US population = 330 million
of users who listen to music via digital apps = 60% (excluding kids and older generation)
% of users lost to competition like Apple Music, Youtube etc = 50%
Premium Subscription: 10 dollars per month
Spotify users eventually pay if not in the initial month. They may pay for 1 month or 3 years, that we will consider in the next part. You have heard that their conversion rate is way too good and not below 10% for sure. Assume free to paid % = 25%
Estimate with equation
Revenue per month from premium spotify users = Spotify Active users per month * premium subscription $$ * conversion rate
= 90100.25 = 225 million $
State your assumptions
I assumed conversion rate is high about 25%
I assumed 30% of US population uses Spotify on a monthly basis
Compare with known revenue of competitors or Spotify total revenue (if you know them)
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