Earlier this month, news broke that Spotify was cracking down on users running modded versions of the Spotify app to stream music for free while blocking ads. At the time, it sounded like it was only a few users, but it turns out, the number is a bit higher. Spotify’s IPO filing noted that roughly 2 million users are getting around ads on Spotify without paying, as noted by Reuters.
As of the end of 2017, Spotify reported that it had 157 million active users, of which 86 million were unpaid subscribers. Factor in the 2 million users pirating Premium-esque service by avoiding ads, and that’s roughly 2.3 percent of free Spotify users with modded apps or accounts.
That’s a big deal, as Spotify itself points out in its IPO filing. Free users stealing what amounts to its Premium service without paying for it could increase costs of the free Spotify for the company without providing a corresponding increase to revenue (in either ad views or Premium subscription fees). And unlike most free users — which Spotify counts on to convert to paid customers over time as a key part of its business model — those users with modded versions of the application are less likely to become Premium subscribers.