The days of free Spotify streaming may soon be over. According to reports, the company — which just hit a whopping 15 million paid subscribers earlier this year — is being pressured to limit its free services. Those lobbying to squash the “freemium” model? Record labels.
Per The Verge:
According to the Financial Times, Universal is leveraging current contract negotiations with Spotify to pressure the streaming service to put harsher limits on its free service. The label hopes that such a move would convert more free users into paid subscriptions, which cost $10 per month. CEO Lucian Grainge publicly stated his concerns with the freemium model last month, when he said, “Ad-funded on-demand is not going to sustain the entire ecosystem of the creators as well as the investors…”
Other labels are coming to the conclusion that ad-supported free streaming services need to be adjusted, according to reports. Unnamed sources tell Rolling Stone that “most” labels are pushing for more limits on free music streaming. In addition to Universal, both the Sony Music and Warner Music CEOs have recently expressed doubts about free streaming — one said paid and free subscriptions need to be more “clearly differentiated.”
What the labels are saying does make some sense. After all, last year, Taylor Swift took her entire catalog off Spotify claiming the streaming giant didn’t pay enough. Recently, Icelandic artist Björk pulled a similar stunt, saying, “It’s not about the money; it’s about respect.”
As The Verge notes, one possible option that these labels may push for is limiting “all free streaming to Pandora-like radio stations instead of on-demand music.” As it stands right now, Spotify allows unlimited on-demand streaming on all computer devices.