Data collection is a great way for companies to figure out exactly what its customers want – although there is a slight concern as far as security is concerned. This week at the VentureBeat Mobile Summit in Sausalito, California, Spotify’s vice president of North American advertising Brian Benedik broke down just how the company utilizes data to get a better idea of what its consumers are listening to, as reported by VentureBeat.

With the requirement of a sign-in for consumers, who are either paying or not, Benedik explains that the company gathers an “enormous amount of data on what people are listening to, where, and in what context. It really gives us insight into what these people are doing.”

With a  user base of 15 million paying subscribers (up three million from the year before), Spotify has really flourished on figuring out what its consumers want. It also learned a thing or two about the age of its audience. “All that first-party data is wonderful,” he explained. “We can follow a listening from the desktop to other devices.”

From creating over 400,000 styles of playlists over the years, the company also learned about the kind of things users like to do, explained Benedik. This allows it to put together better advertising for the users that aren’t paying for the service, he believes.

The company came across a big “Oh My God” moment when it realized that it had found a way to renegotiate agreements with record companies in order to provide songs without charging people on mobile devices. Though the planning took about a year’s time, the pace of change with users moving to said devices has been “unbelievable.”

Spotify has also been able to work with typical brands in helping them create a better music experience, including Red Bull and Coca-Cola, who have sponsored musicians and promoted its own special playlists on the channel. “This system allows Coke to have a music identity on Spotify,” explained Benedik.

All of these business tactics combined together have helped Spotify generate better revenue, even from non-paying consumers, as Benedik believes “the longer you stay on (Spotify’s) free model, the more you are likely to upgrade to premium.

“Premium doesn’t work without free. There’s a graveyard of services that have tried to go at this over the last ten years with premium only. It doesn’t work unless you’ve got free and premium working together.”

Read more on Spotify’s findings in the article here.