Spotify Limits Free Model. Next Stop U.S.?
EU based Spotify has announced new limits on its popular free music service. As of May 1st, users not paying for a premium service will be able to listen to a song just 5 times and be limited to 10 hours per month after the first 6 months. The move reflects the cost of licensing music vs. revenue from advertising; and could pave the way for a U.S. launch.
"Above all, this means we can continue making Spotify available to all in the long-term," Spotify CEO Daniel Ek on the company's blog. Many of the comments to Ek's post from Spotify users were negative. "Ah well, it was nice while it lasted," wrote one. "That's me over to Grooveshark/YouTube/piracy." Others were happy with paying and backed the change, hopeful that more money would lead to an improved service.
YouTube and Spotify's own success are proof of consumer interest in free music streaming. The ability of Spotify and competitors from MOG and RDIO to Apple, Google and Amazon, to innovate and attract new customers will to pay could determine if the music industry is in turnaround or stalled yet again. For the labels and publishers, who effectively forced Spotify's hand, it's time to become a true partner rather than a roadblock.
More details of the new plan:
- New Spotify users have access to free service as it is today for the first 6 months.
- As of May 1st, any user who signed up to the free service on or before November 1st 2010 can play each track for free up to a total of 5 times. Users who signed up after the beginning of November will see these changes applied 6 months after the time they set up their Spotify account.
- Total listening time for free users will be limited to 10 hours per month after the first 6 months.