It was good while it lasted.
Spotify is reportedly about to lose one of its biggest fights — making sure its users get to hear any music that’s on its platform, regardless of how much they pay.
That’s all reportedly about to change, as the record labels who supply Spotify with music demand that the hottest new releases are only available to paying users. Free users will just have to wait.
According to Music Business Worldwide (MBW), there are more changes on the way which mean Spotify’s free tier will look less like a fully-fledged streaming service and more of a shop window for the premium offering.
The three biggest music labels — Universal, Warner, and Sony — want more control over what’s available to free and paying users on Spotify.
According to one source speaking to Music Business Worldwide, that might mean free users only get to listen to singles from a particular artist, but not whole albums.
The labels also want to control how Spotify markets new releases. They want to be able to promote new releases through “audio and visual ads” to Spotify’s 100 million-plus users.
And finally, the labels want Spotify to keep bringing in paid users. Currently, there are 50 million subscribers. According to MBW, the labels want the streaming service to commit to future growth targets.
All of this is a sign of the ongoing power struggle between the music industry and Spotify. Currently, Spotify doesn’t have any long-term deals with the three big labels, instead keeping their music catalogues on the service on a rolling monthly basis.
That can’t go on if Spotify is to IPO, which it’s reportedly planning in 2018.
And that means the music labels have serious leverage over Spotify, and can make serious demands about the way the service runs its business before they will agree to new deals.
This is bad news for Spotify’s free users, who don’t have much incentive to start paying unless they use the service regularly. It might also drive them to other free streaming services like YouTube, where new releases are often uploaded illegally.
It’s a tough problem for Spotify, which has always said its free tier competes with piracy. But the rightsholders might prove too strong. As one told MBW last year: “If Spotify just windowed every new album for two weeks on premium, one rule for everybody, 90% of their problems would go away.”
More from Business Insider UK:
- Google responds to YouTube ad boycott: ‘We can do a better job’ (GOOG)
- The 10 things in advertising you need to know today
- One of London’s smallest houses just sold for more than £100,000 over its asking price
- DeepMind organises its AI researchers into ‘strike teams’ and ‘frontiers’ (GOOG)
- The Bank of England’s most hawkish policymaker thinks people are overestimating a key negative of Brexit