Spotify moving towards Premium-only music content amid label pressure, sources say

Posted:
in General Discussion edited August 2015
Although it should continue to provide a free, ad-supported tier, Spotify is reportedly planning to limit some of its music content to Premium subscribers in reaction to pressure from record labels.




Some songs or albums may only be available to paying Premium users, whether permanently or temporarily, sources explained to Digital Music News. The exact set of restrictions has yet to be settled, but a free listener might only be able to hear a popular album for a limited amount of time, or listen to just one or two songs from it. One or multiple variations of these concepts could be put into play.

The transition will likely happen in early 2016, the people said. This would not only give Spotify the time to cement licensing deals but produce updated Web, desktop, and mobile apps.

The sources claimed that the company is responding to pressure from the three largest music labels -- Sony, Warner, and Universal -- ahead of an October 1 renewal deadline. The CEOs of Sony and Universal in particular have vocally opposed ad-based tiers, since they're thought to devalue catalogs, and typically generate less revenue.

Free listening has long been one of Spotify's main selling points. The company's CEO, Daniel Ek, "hates" the idea of restricting content, according to one source, but could be forced to compromise.

The European Commission recently cleared Apple of colluding with labels against free services like Spotify's, but both that organization and U.S. Federal Trade Commission are still concerned that iOS App Store policies may be stifling competition. Apple claims a 30 percent cut from App Store transactions, forcing companies like Spotify to either charge more in-app, take a severe financial hit, or somehow encourage Web-based sign-ups. Apple Music is included by default in iOS 8.4 and has no revenue-sharing obstacles.

Apple has moreover made exclusives a draw for its service, using artists like Dr. Dre and Taylor Swift to encourage sign-ups. The company so far has 11 million subscribers, though it's unknown how many will stick around once their three-month free trial period is finished at the end of September.
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Comments

  • Reply 1 of 23
    maestro64maestro64 Posts: 5,022member
    wait, but, current day radio station are all ad based revenue. I guess we will no longer here certain songs on the radio unless you are paying for a service like XM/Sirius.

    Not sure how ad based streaming is much different than ad based radio broadcasts. Artists and Lable still get their penny per play and the money to pay the bill comes from ad revenue.
  • Reply 2 of 23
    Ad based streaming is worse than ad based radio broadcasts because radio most of the time only play the popular singles. So if you want to listen to the rest of the album, you gotta buy it. Also you can't pick and choose what song to listen at any moment in time unlike streaming. So radio acts as a promotional tool to encourage you to buy the other songs on the album.

    When you can stream every song in any order and all you have to deal with is some advertisement, what is the incentive to buy anything?
  • Reply 3 of 23
    foggyhillfoggyhill Posts: 4,767member
    Quote:
    Originally Posted by Maestro64 View Post



    wait, but, current day radio station are all ad based revenue. I guess we will no longer here certain songs on the radio unless you are paying for a service like XM/Sirius.



    Not sure how ad based streaming is much different than ad based radio broadcasts. Artists and Lable still get their penny per play and the money to pay the bill comes from ad revenue.

     

    In Radio, you can't get the exact song you want, in the order you want, when you want it.  Basically, ads in streaming are supposed to pay for all the money the artists would lose by people not buying their stuff, they don't; especially for the 5% of artists that generate millions of sales like Taylor swift.  She'd lose milions by letting all her stuff go to ad paid on demand streaming.

  • Reply 4 of 23
    jason98jason98 Posts: 766member



    Now expect a lawsuit against Apple for "colluding" with music publishers...

  • Reply 5 of 23
    Quote:
    Originally Posted by Maestro64 View Post



    wait, but, current day radio station are all ad based revenue. I guess we will no longer here certain songs on the radio unless you are paying for a service like XM/Sirius.



    Not sure how ad based streaming is much different than ad based radio broadcasts. Artists and Lable still get their penny per play and the money to pay the bill comes from ad revenue.

     

    Um, are you absolutely sure that radio stations pay artists? Because they are lobbying right now against legislation that would actually force them to pay per play.

  • Reply 6 of 23
    uraharaurahara Posts: 588member
    Quote:

    Originally Posted by quanster View Post



    Ad based streaming is worse than ad based radio broadcasts because radio most of the time only play the popular singles. So if you want to listen to the rest of the album, you gotta buy it. Also you can't pick and choose what song to listen at any moment in time unlike streaming. So radio acts as a promotional tool to encourage you to buy the other songs on the album.



    When you can stream every song in any order and all you have to deal with is some advertisement, what is the incentive to buy anything?

    Worse for who?

    For me the premium-streaming is the best!

     

     

    Quote:

    Originally Posted by foggyhill View Post

     

     

    In Radio, you can't get the exact song you want, in the order you want, when you want it.  Basically, ads in streaming are supposed to pay for all the money the artists would lose by people not buying their stuff, they don't; especially for the 5% of artists that generate millions of sales like Taylor swift.  She'd lose milions by letting all her stuff go to ad paid on demand streaming.


    She would never get any buck from me. I have not bought any albums for 15 years. Radio and streaming like Spotify is the best solution for me. 

  • Reply 7 of 23
    I'm just hoping they match Apple Music Pricing. Spotify is a bit too expensive for the family.
  • Reply 8 of 23
    hill60hill60 Posts: 6,992member

    Spotify free is garbage in Australia, having had a trial of premium the music stopped on my phone when the trial finished unless I was on the same wifi network as my PC.

     

    All you can do is browse the music.

     

    Apple music has more content at the same price e.g. AC/DC and works well.

  • Reply 9 of 23
    ecatsecats Posts: 272member

    No one will buy the cow if the milk is free. 

     

    So here we have Spotify, yet again blaming their inevitable changes on something other than their unsustainable business model. Today it's "Label Pressure" (they won't give it to us for free.) Spotify have a habit of blaming others for their ineptitude. I wonder how much they believe it?

     

    External analysis shows that if operated in ideal circumstances, Spotify still won't turn a profit. It's no surprise then that Spotify has never made profit. Even cashed-up Apple avoided competing directly with Spotify's terms as they aren't just unsustainable, they're gravely.

     

    I think it's nice that Spotify has been able to provide free music, even if it has spoiled the market into believing that music should be free. However Spotify need to take responsibility for their operations, since blaming the labels and competitors doesn't stand up to scrutiny: they've never been profitable.

     

    Spotify is damaging to the streaming music market competition. Their free tier is such a good offer that there is no reason for consumers to pay for their premium service, subsequently they don't. The result? start ups can't compete with investor funded "free" and larger businesses that own a calculator know they can just standby for a Spotify bleed out. The result is that we have basically no movement in streaming services, when the market should be blooming.

  • Reply 10 of 23
    revenantrevenant Posts: 621member

    so the music companies whine and complain because they think they can do better without apple. then apple comes up with a different idea for streaming and now the music industry sees more money and wants everyone to do the same. 

     

    you may not like iTunes or apple music- but you have to admit it works. 

     

    it is kind of embarrassing that the music industry is being shown how to make money in their own industry by a company that does not make music nor is an advertising agency.

  • Reply 11 of 23
    dasanman69dasanman69 Posts: 13,001member
    revenant wrote: »
    so the music companies whine and complain because they think they can do better without apple. then apple comes up with a different idea for streaming and now the music industry sees more money and wants everyone to do the same. 

    you may not like iTunes or apple music- but you have to admit it works. 

    it is kind of embarrassing that the music industry is being shown how to make money in their own industry by a company that does not make music nor is an advertising agency.

    What's the different idea?
  • Reply 12 of 23
    aaronjaaronj Posts: 1,595member

    Don't worry.  She'll take care of it.  :)

     

  • Reply 13 of 23
    My immediate family is an interesting example of the demographic challenge Apple may face in getting a large number of paid subscribers:

    Three people:
    - Dad: I am an Apple fan, use Apple Music, and enjoy how it lets me explore music I don't own.
    - Mom: My wife doesn't use it because she prefers to listen to familiar music in her library.
    - Daughter: My daughter doesn't use it since she's used to getting free music from YouTube.

    I want Apple Music to succeed, but there is admittedly an uphill battle with some demographic groups (older adults, kids).
  • Reply 14 of 23
    aaronjaaronj Posts: 1,595member
    Quote:

    Originally Posted by Slprescott View Post



    My immediate family is an interesting example of the demographic challenge Apple may face in getting a large number of paid subscribers:



    Three people:

    - Dad: I am an Apple fan, use Apple Music, and enjoy how it lets me explore music I don't own.

    - Mom: My wife doesn't use it because she prefers to listen to familiar music in her library.

    - Daughter: My daughter doesn't use it since she's used to getting free music from YouTube.



    I want Apple Music to succeed, but there is admittedly an uphill battle with some demographic groups (older adults, kids).



    I've enjoyed it ... when I remember to use it.  I know that sounds ridiculous.  But the stuff in my library is so familiar, and I so often just click on some playlist or album I've already listened to a million times, just out of habit.  It's sort of weird, when I think about it, to be honest.

     

    But I'll definitely sign up for a few months and see if my usage habits change.

  • Reply 15 of 23
    croprcropr Posts: 1,053member
    Quote:

    Originally Posted by revenant View Post

     

    so the music companies whine and complain because they think they can do better without apple. then apple comes up with a different idea for streaming and now the music industry sees more money and wants everyone to do the same. 

     

    you may not like iTunes or apple music- but you have to admit it works. 

     

     


    The only thing that is really different with the Apple streaming is that the Apple Music app sucks

  • Reply 16 of 23

    First, Spotify's free tier isn't that good an option: use on mobile is very limited. And that's where everybody listens to music.

    Second, Spotify knows better than anyone else, including you and me, how and if people are subscribing. They need the free part to get people to use Spotify, and after that to get them to pay. Spotify is not competing with buying digital music. They're competing with free streaming: YouTube.

    Third, Spotify's major share holders are the recording companies. They can either make a profit from licenses (while reducing the profits of Spotify), or the other way around.

     

    Furthermore, just read Lefsetz. http://lefsetz.com/wordpress/index.php/archives/2015/08/09/11-million-subs/

  • Reply 17 of 23
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by dasanman69 View Post





    What's the different idea?



    You should know by now that Apple never does anything that has been done before.

  • Reply 18 of 23
    qvakqvak Posts: 86member

    Sirius XM has an amazing streaming platform. 9.99 a month or far less if you negotiate gets you a bunch of commercial free music channels, most fully customizable re: playlist depth, mood and tempo.

     

    Apple music is great because it integrates into your library, 9.99 a month gets you more iTunes music than you know what to do with.

     

    Other streaming services exist focusing on genres, digitally imported for electronica, other services for classical, etc.

     

    Spotify? With this move they become irrelevant. Burning data for FM radio-tier content and advertisement...? No thanks.

  • Reply 19 of 23
    qvakqvak Posts: 86member
    Quote:

    Originally Posted by AaronJ View Post

     

    Don't worry.  She'll take care of it.  :)

     


     

    Are those golden dildos jutting out of her dress? Absolutely degenerate.

  • Reply 20 of 23
    sphericspheric Posts: 2,107member
    Quote:

    Originally Posted by EricTheHalfBee View Post

     

     

    Um, are you absolutely sure that radio stations pay artists? Because they are lobbying right now against legislation that would actually force them to pay per play.




    They do in Europe. USA, AFAIK, no.

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