NEW YORK (TheStreet) -- Spotify announced Wednesday it has passed 10 million paying subscribers globally, an impressive figure that firmly establishes the company as the leader in the streaming music space and brightens the future of the sector generally, loosening its ties to a purely advertising-based model.
Spotify also said it now streams to 40 million active users in more than 56 countries, including subscription and free, ad-driven services. The company in March unveiled its first major redesign for its Web site and app, unifying the new look across platforms, adding some functionality and a new black background and cleaning up its menus and artwork display.
One of the biggest questions for the streaming music sector since its inception has been moving music consumers from a purchase-and-own model to a subscription model. Download, CD and vinyl collectors had to be convinced to take part in this new idea, to pay for subscriptions to a service that would grant them unlimited access to their favorite music.
As a result, offering free listening accompanied by ads has been the bread-and-butter of the space until now. But ad-driven revenue is notoriously unstable, driving services to push harder toward a "freemium" model, where each free service offers a subscription upgrade designed to supply a more predictable income stream.
So the elephant-in-the-room question for these services has been: How many subscribers can they get?
That question matters even more to Spotify at the moment, as the company is rumored to be considering an initial public offering later this year.