The Freemium Quandry

Music Business Worldwide:

According to a new report from the Wall Street Journal, Spotify is ‘caving in’ to demands for certain artists to be able to keep their records off Spotify’s free tier.

The newspaper says: “In private talks, Spotify has told music executives that it is planning to allow some artists to start releasing albums only to its 20 million-plus subscribers, who pay $10 a month, while withholding the music temporarily from Spotify’s 80 million free users.”

MBW understands that the latest internal Spotify figures show that the platform now has close to 100m active users, and 25m+ paying customers around the world.

Atom Factory’s Troy Carter via Digital Music News:

There have been times where I had to get on the phone with really big managers, and — who have really big clients, and tell them what the downside was for them leaving their product off of Spotify. All of the music is still available on YouTube for free. It’s still available on the piracy services for free, so you’re missing out on a big audience and you’re missing out on a revenue stream.

I don’t know if Spotify needs to get over the Taylor Swift problem, as much as it is… people have to see the future. Because free already exists, it’s a flawed argument when you say ‘I don’t want my music on any service that offers free,’ when free already exists.

Update: Music Business Worldwide:

Those weeping for the death of Spotify’s ad-supported bonanza are forgetting something: it’s only for a quirk of recent history that freemium was ever allowed to bloom in the first place.

As sites such as The Pirate Bay (not to mention YouTube) were left unfettered by international lawmakers, {Spotify founder Daniel} Ek’s argument in the lead up to Spotify’s 2008 launch – basically, hi guys, nice to meet you, we’re your best worst option – was cast-iron. This year, despite all of Spotify’s success, that contention has started to look a little more fragile.

If Ek’s offer of all music, all free, all the time was forever destined to be quashed, you have to say he’s made the most of it. By ‘rescuing’ an industry plunged into paranoia and desperation by piracy, Spotify has raced to a near-100m user base (and an $8bn+ pre-IPO valuation) with what hindsight may prove was a once-in-a-generation freedom to dice with price.

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