In a dramatic shake-up, streaming site Spotify has announced that it is to half the amount of time that users can listen to tracks through its service each month for free.
From May 1, non-paying subscribers will be limited to 10 free hours of music as opposed to 20 and will only be able to listen to an individual track five times. New users signing up to ‘Spotify open’ will be moved to the restricted mode of listening six months after they register and paying subscribers won’t be affected.
Despite an initial struggle to get paying subscribers on-board, subscriptions to the ad-free unlimited and premium versions reached 1 million in March this year. Integration with mobile platforms including the iPhone and ongoing discussions with the ‘big four’ major labels have paved the way for a launch in the US scheduled for this year.
Posting on the official Spotify blog co-founder and CEO Daniel Ek said: “Spotify’s aim from the very beginning was to make music on-demand available to all. 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”.
Ek continued: “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”.
Although Spotify was valued to be worth £190m by the Trade Register of Luxembourg last year the balance sheets told a different story with audited annual accounts for 2009 showing a loss of £16.6m in the UK.
Generate debate: Was free Spotify too good to be true? Will this result in more paying subscriptions or a mass migration back to illegal torrent sites or competitors such as We7? What are Spotify’s key motivations in doing this other than to boost paying subscribers? Could it be trying to recoup those millions of micro-payments made to rights holders each time a track is played? Or tipping its hat to US major labels notoriously resistant to the idea of free streaming? Would it be sustainable otherwise?
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