Spotify reportedly under pressure from record labels to limit free streaming

By Shawn Knight
Mar 23, 2015
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  1. spotify music rhapsody streaming universal pandora record labels internet radio streaming music universal music group listening limits

    Streaming music services like Pandora, Rhapsody and Spotify are largely credited with helping steer the music industry away from the piracy path. The current model is sustainable (and legal) but for the largest music group of them all, it’s still not generating enough revenue.

    Last month, Universal Music Group CEO Lucian Grainge voiced his concerns regarding the freemium business model that’s popular among the top streaming providers. The executive said ad-funded on-demand is not going to sustain the entire ecosystem including creators and investors.

    Now it looks like they’re going to try and do something about it.

    A recent report from the Financial Times claims Universal Music Group is using ongoing contract negotiations to try and strong arm Spotify into enforcing additional restrictions on its free listening service. The idea is that limiting access would convince more free users to sign up for the $9.99 per month premium service which would in turn put more money in the hands of labels.

    According to the Rolling Stone, Universal isn’t the only company pushing to further restrict free offerings as “most” labels have joined the movement. What’s more, executives with Sony Music and Warner Music have both expressed doubts regarding the freemium model.

    One option that labels would be happy with is limiting the amount of music a user can listen to (perhaps X number of hours per month). Another possibility would be doing away with free on-demand music, instead forcing the field to adhere to the Pandora-style Internet radio model.

    It’s an interesting change of heart as at one time, most record labels championed the idea of free ad-supported streaming. Of course, that was at a time when many were pirating MP3s.

    Permalink to story.

  2. RustyTech

    RustyTech TS Guru Posts: 818   +384

    "The executive said ad-funded on-demand is not going to sustain the entire ecosystem including creators and investors."

    You guys/gals see how artistes are an after-thought here?
    CanadEan84 likes this.
  3. Kibaruk

    Kibaruk TechSpot Paladin Posts: 2,420   +469

    I think this will end up back-firing them in the rear.
  4. ikesmasher

    ikesmasher TS Evangelist Posts: 2,526   +829

    Yea if they limit free streaming their userbase is going to flush down the toilet. Heck, id probably cancel my premium account just because that annoys me.
  5. Stanick

    Stanick TS Rookie

    That is because Apple are soon launching beats streaming service. Record labels want to destroy Spotify in favor of Beats...
  6. Jim$ter

    Jim$ter TS Booster Posts: 156   +31

    Spotify is already starting to annoy me with the horrible desktop app redesign and the billboard playlist aren't currently working. If Apple (beats) does a good job with their client I might drop Spotify.
  7. Is Spotify not going with Sony on ps4. For in game music I'm quite sure that would gain additional income when it happens.
  8. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 8,430   +2,822

    Then kick out the investors, the creators is what keeps the ecosystem going. The investors are all leaches.
    CanadEan84 and Auth3ntic0 like this.

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