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SEC filing shows anomaly in Spotify’s data report, are Users Abusing the System?

  • Users have found a way to overcome Spotify advertisements without paying.
  • SEC filing shows 2 million users unaccounted for. 

While Youtube has recently revealed its reason for inserting an abundance of advertisements that interrupt music videos, they are not the first music streaming service to do so. Youtube, in an effort to promote its new service that encompasses the current Youtube Red and Google Play Music, have let it be known that by frustrating users with the overwhelming advertisements, they hope to push them towards subscribing to the new service. This is potentially an effective approach as others have been employing the same tactic for a long time now. This includes Spotify, consumers’ favorite music streaming service.

Millions of people have been paying about ten dollars per month for Spotify Premium. A version that denies all advertisement from interfering their music streaming. This method is ostensibly effective, except that some people have found a way around it. About two million people have successfully found a way to get the premium service without having to pay the fee every month.

Based on the Securities and Exchange Commission filing last week, Spotify has noticed a number of its presumed users were not paying for the service. In fact, the report has specified that many were “suppressing advertisements without payment”. Needless to say, the first question anyone is asking is how? How and in what way are they doing so?

“[We] have detected instances of third parties seeking to provide mobile device users a means to suppress advertisements without payment and gain access to features only available to the Ad-Supported Service on tablets,” quoting from the SEC filing.

We are informed that users are pulling this off by using advertisement blockers. According to Business Insider, this has led to the imprecision of data and statistical reports. For each user who is receiving the premium service free-of-charge, there is a blank slate in what is supposed to have been their name and user information. They were only able to track the general number of people who are using the application, with or without paying. Of course, Spotify is on edge for missing out on the profit. However, that is not the sole extent of their distress. On top of the fact that two million users are ditching out on payments that could have amounted to a large sum, the firm is also breaking down on the fact that this could and might have led to a bigger problem.

Just last month, Spotify has filed for its initial public offering (IPO), seeking one billion dollars for its commencement on the New York Stock Exchange. Subsequently, the firm is careful in its calculations in order to provide the most accurate user data to prospective investors. By having a conspicuous anomaly in the reports could vastly impact its stock value. According to Spotify, those who are skipping out on the legitimate process and payments have caused a problem in the reports. The number of the application’s monthly active users count is not overestimated. With the SEC report, the final number has been reduced from 159 million to 157 million by December 2017. The firm reiterates the importance of these numbers.

In a world where programmers and hackers are everywhere, how can firms ensure its security and terms in order to control situations like this? The extent of their skills is far beyond our expectations and there is just so much that we are yet to know.

Within this month, we have had news of free Ethereum getting stolen from Coinbase and now users are finding ways to overcome the advertisements. As frustrating as it is for users to be interrupted by advertisement amidst the most sensational playlists, Spotify is no doubt feeling the same way, or worse.

Featured image via flickr/ Andrew Mager

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