EnTech: Spotify is not ending its free service (Updated)

Spotify is not ending its free service (Updated)


Update: We’ve gotten word from a Spotify spokesperson that the Free model isn’t going anywhere. Director of Communications at Spotify Graham James told me “This is totally false.  Our model is working.” 
Digital Music News is claiming that Spotify is coming under pressure from music labels to end its free, ad-supported service, limiting users to a three-month free trial.

The three-month ‘proposal,’ advanced most principally by major labels Universal Music Group and Sony Music Entertainment, would allow current, free-access, ad-supported (or ‘freemium’) subscribers to continue their plans for 6 months, while new users would be limited to three months only.

Coincidentally or not, Universal Music Group is one of the labels specifically mentioned in two investigations into whether Apple is attempting to stifle competition in the run up to launching its own streaming music service … 
Citing “multiple [but anonymous] sources,” the report says that Spotify itself doesn’t want to make the change, but has been facing increasing reluctance by labels to continue to support its free tier, having to offer both substantial cash advances and equity stakes to obtain the necessary agreements.
Sony is said to be another label behind the proposal, with one source suggesting that ‘proposal’ may be too gentle a term.

But, in all reality, remember that [Sony Music Entertainment CEO Doug] Morris and [UMG CEO Lucian] Grainge aren’t really asking as much as they’re telling.

Warner is reportedly more cautious, feeling that the relatively small revenue from ad-supported plays is better than the alternative, with CEO Stephen Cooper expressing this view on a recent earnings call.

You know to be crystal clear, piracy is zero revenue, it’s the theft of intellectual property, and it’s not good for anyone. So all of these models are better than piracy, that’s number one.

Smaller labels are also said to be less keen, though the proposal does allow artists to choose to continue to allow free plays beyond the trial period in an ‘up and coming’ category.
With Digital Music News the only source, and none of its own sources named, we’re filing this one under ‘interesting rumor’ for now. We’ve reached out to Spotify for comment and will update should we get a response.
The European Commission last month launched an investigation into allegations that Apple was applying pressure to labels, with the DOJ doing the same earlier this month. Apple is expected to launch its streaming music service at WWDC in June, with a later release date.

Spotify turns up the heat against Apple’s streaming music service, making fresh anti-competitive behavior claim

Apple said to be closing music deals in order to launch ‘iRadio’ at upcoming WWDC

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1. Cory © (@Nardes) says: I don’t think I’d believe that report… I doubt labels would advertise/push out new songs so quickly to Spotify if they were having such issues.Anymore when a band/artist releases a song they now give out an iTunes link and a spotify link
   
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2. chrisl84 says: Casualty number 1 from good ol anti-competitive Apple.
   
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   • Sons of Ares (@SonsofAres) says: if it’s something you don’t like, it’s “anti-competitive.” If it were a company you approved of, it would be “the free market at work.”
     
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3. Chris (@uglyROBBER) says: Listen, I do think that spotify should get rid of their free tier because its freaking $10 a month which for most people isn’t that big of a deal. If people are willing to go out and buy a cd from a store or from iTunes then just take that money and use it in one of the many streaming services out there. $10 is very cheap for the amount of music you’re allowed to access.
   
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   • chrisl84 says: Tell that to the tens of millions of high school kids who dont have an income yet still enjoy listening to music….perhaps they should just go back to pirating.
     
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     • jkratz says: That’s an interesting leap of logic to make. Do you know if those tens of millions of high school kids are listening to the ad-supported Spotify tier? They certainly aren’t on their phones because the free tier doesn’t work on those….just tables and computers.
       
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     • chrisl84 says: Yeah, you can’t shuffle any playlist/album/or artist on the free tier on your phone….oh wait, yes you can, you just cant select individual tracks, as well as listen to Spotify Radio.
       
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     • James Cude says: There’s this amazing free/ad-supported over the air service called FM Radio for the children.
       
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     • chrisl84 says: Lol, yeah thats why they are number one pirating age group…..cus they settle for radio
       
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     • gcfio (@gcfio) says: Guess being a child of the 70s and 80s. I remember saving up to buy an album I really wanted. The radio style streaming like Pandora is fine. Why does everything have to be free? Why does everyone feel entitled to get stuff for free? Maybe high school kids should go back to realizing you need to work to make money to get nice things.
       
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     • Chris (@uglyROBBER) says: Most of these applications such as spotify have family plans for $15 and now most parents of these teenagers or high school kids have smart phones so instead of stealing music or listening to ad supported music they can take this route.
       
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     • Sons of Ares (@SonsofAres) says: Why is theft the first thing that always comes to mind?
       
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   • Dr. Light (@pc_doc80) says: $10 a month is a lot for some people, including but not limited to those still in high school. I think spotify is going to loose a lot of market share once apple drops. Spotiy has been making some business depressions that may make sense from a dollar perspective but not much to those who shell out those dollars.
     
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4. Matthew Sims says: The same “Digital Music News” that posted their “hahaha April fools” about being acquired by Google and ending the free tier in the middle of March?
   
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5. srgmac says: The free tier absolutely works on phones, I use it all the time…and it looks like this is confirmed now because I just got an email from spotify asking for money to join a three month trial…this is very disappointing. This will not help piracy at all, I can tell you that.
   
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6. . (@AKEBTW) says: The rumor never suggested it’s ending its free service, it stated they are limiting their free service.
   
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7. superwoody5000 says: Labels still don’t get it, well Warner does, but Sony and Uni don’t. The labels are like the frenemy you know you have but nobody wants to admit it. The artists are screaming because they only get the per stream rate, they get 7 shades of nothing from the label. So the labels pretend “This is not good for artists” and “free music services screw the artist” when they pocket 75% of spotify’s revenue.The labels want the free tier gone, because a paid tier equals more coin for them. Remember, out of that $10 you pay per month, $7.50 goes to the label while 80cents goes to artist. leaving the rest for Spotify to use to pay its staff and deliver the content.
   When a true popcorn time for music comes out (and it will if they ditch the free tiers)… then you watch the labels scramble like mad cats. Who suffers in the end, the artist. The poor bastards who create the content the labels royally fuck over.
   Fuck the man
   
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   • Sons of Ares (@SonsofAres) says: So, how big is your music collection? Or is that somehow not subject to your “fuck the man” mantra?
     
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