Spotify slow to turn users into cash

Advertising income at online music service Spotify stood at just £60,000 in July, a report claims.

According to a report in the Sunday Times, the service – which is free to listen to with ads or can be subscribed to for £9.99 a month if users want to avoid ads – has as few as 10,000 subscribers from 2.5 million listeners.

The report also quotes industry insiders as saying that the service streamed 700 million free songs in July at an estimated cost of $3 million – a figure which rises to $6.5 million including overheads and payment for internet bandwidth.

Spotify recently launched a mobile version, which lets subscribers download the service for free from Apple’s App Store and the Android Market.

The app allows users to stream music over WiFi or 3G and gives them access to their Spotify account where they can search for new songs.  Consumers can also play music on a plane or on the underground because it can be used without a connection.