Sweden’s Spotify hits one million paid music subscribers

Spotify, the much-hyped music streaming company from Sweden, announced today that it has reached one million paying subscribers. Unlike most other music startups, which seek to cover the high cost of licensing music from record labels through advertising revenues, Spotify has been insistent about sticking to its freemium model, in which it gives away some services in the hopes of convincing some users to pay for more.

This model has not deterred growth, as paid users have grown over 300 percent since early 2010. Only three months ago, CEO Daniel Ek said at the conference that the company had 750,000 paying subscribers. Even at that time, Spotify claimed it had more paying subscribers than any other similar service in the world.

Spotify provides cloud-based streaming music in Europe but hasn’t entered the US market. Even so, Spotify’s company blog announced that over 200 million playlists had been created.

The company’s announcement comes on the heels of having raised a large round of financing from Russia’s DST, the investment company that has backed Facebook, Groupon and Zynga. That deal reportedly valued the company at $1 billion.