Spotify says 2 million users avoiding ads without paying

At least 2 million Spotify users are dodging ads without paying for premium services. On Friday, the music-streaming service revealed that its non-paying users are illegally listening to ad-free music.

Spotify has 157 million active users as of the end of 2017, with 71 million of them paid subscribers who listen to ad-free music. The rest of the subscribers, about 86 million, are supposed to listen to advertisements in between listening to music.

However, at least 2 million of them have found a way to listen to Spotify ad-free, all without paying Premium services, which cost US$9.99 (AU$12.92) per month. The fraudulent users represent 1.3 percent of its total user base.

The company announced that it had detected the breach last week. It also made the disclosure a week before its April 3 public offering on the New York Stock Exchange.

Earlier this month, Spotify said it was disabling access from unauthorised Android apps that allow users to avoid listening to advertisements and usage restrictions from free accounts. It has been alerting users that it has disabled their access from the hacked apps, warning them that their accounts may be shut down if they continue to use such apps. A Spotify rep confirmed the notices to Variety.

As a result, the Swedish company reduced its monthly active users from 159 million to 157 million as of the end of 2017. It generated nearly US$5 billion (AU$6.47 billion) in revenue in 2017. Its operating loss was US$461 million (AU$596 million) compared to around US$425 million (AU$550 million) in 2016.