Thursday 14 April 2011, 11:27 | By

The end of free Spotify?

Digital Top Stories

Spotify

Well, we all knew it was too good to be true, didn’t we? Spotify announced some pretty radical changes to their freemium service this morning.

First, all non-paying users will have the number of hours of free listening available to them cut to ten hours. Those who signed up to Spotify early and currently enjoy unlimited listening, will have the monthly time limit applied on 1 May. Those who use Spotify Open, which already has a 20 hour limit, will have their monthly allocation cut down to ten after six months.

But perhaps more importantly than all that, a new rule will be applied to every free account after six months that says any one track can only be listened to for free five times, transforming the free service into a preview platform rather than an ad-funded all-you-can-eat on-demand set up.

This is quite a radical development, though not a surprising one, given the arguably unsustainable costs of running the free service and the concerns expressed about the entire freemium concept by the US labels, who have played hard ball in negotiations to get Spotify launched Stateside. It means the free service is now very much a marketing tool for the premium five/ten pound a month package, rather than a service in its own right.

Whether today’s announcement will lead to a spike in premium subscriptions for Spotify or a mass exodus to competitors like We7 or the good old illegal music services remains to be seen, we’ll very possibly see a combination of both.

Announcing the changes, Spotify said on their company blog today: “Spotify’s aim from the very beginning was to make music on-demand available to all. To give you the power to listen to, discover, share and manage your music the way you want to – simpler, faster, better – while making sure the artists whose music we all love continue to see the benefits as we grow”.

They continued: “Making Spotify available to millions across Europe has seen the service become incredibly popular. People are listening to more music and from a wider range of artists than ever before, and are giving up on piracy, which is exactly what we hoped would happen. So it’s vital that we continue offering an on-demand free service to you and millions more like you, but to make that possible we have to put some limits in place going forward”.

They conclude: “The changes we’re having to make will mainly affect heavier Spotify Free and Open users, as most of you use Spotify to discover music – on average over 50 new tracks per month, even after a year. Plus, the average user won’t reach the limit on plays for 7 out of 10 tracks, after a year of using Spotify. For those of you using Spotify to find new tracks to enjoy and share with friends, these changes shouldn’t get in the way of you doing that. Rest assured that we’ll continue to bring you the biggest and most diverse music catalogue available. For anyone who thinks they might reach these limits, we hope you’ll consider checking out our Unlimited and Premium services, neither of which will be affected, plus we have a 7-day free trial for Spotify Premium that we’d love you to try”.

Spotify’s long awaited US launch is expected to finally take place this year, presumably with a similar limited freemium model. Sony and EMI are both on board and Universal is expected to sign up soon. That would leave Warner as the hold out, but everyone seems convinced Spotify could launch without their catalogue – and anyway there could be a change of management there in the next few months which could enable a deal to be fast-tracked.

OR READ MORE ABOUT:

  • Industry seeks judicial review on private copy right
  • Vince Power says PRS injunction against him set aside
  • Cheryl’s vanity label not for kids
  • Retailers call for a Monday global release day
  • Spotify revenues up in 2013, though operating losses up too
  •