The free, ad-supported tier of Spotify’s music-streaming service could soon become a little less appealing if a report from the Wall Street Journal proves true: Spotify will reportedly enable artists and record labels to restrict access to certain songs to paying customers only.
This isn’t an official policy change just yet, and it’s unclear how long such blackout periods would last. Spotify reportedly wants to gauge the effect on its service first; it wants to determine whether the change will push customers towards its paid tier or drive them away altogether.
Spotify argues that its free tier is necessary for its survival as it looks to compete with other free music services, such as Pandora and YouTube. Artists, most notably Taylor Swift, disagree and claim that free services hurt music sales. More recently, Adele decided to withhold her new album, 25, from streaming when it was released on November 20. Only one track, “Hello,” has been made available for streaming. Consumers must purchase the rest or the album as a whole—and they’ve done so in droves.
Why this matters: If the Wall Street Journal report is accurate, this move could be the beginning of the end for free-tier music services as service providers gradually lose access to the hit songs that attract new subscribers.
What will happen with other services, such as YouTube, that have used free music streaming to drive traffic? Early on, you could find just about anything there for free, until the music industry forced the company to tighten up ship and delete unauthorized videos or face expensive litigation.
Today, music videos on YouTube are primarily controlled by Vevo, a joint venture of Google and several record labels. The partnership was created in order to share advertising revenue, but that revenue stream has proven to be modest, leaving many of those partners dissatisfied.
Emboldened by its victory over Spotify, might the music industry turn around force YouTube, Pandora, Google Play Music and other free services to also restrict access to hit songs to paid-subscriber tiers? Our magic eight balls says “signs point to yes.”
Sign up for MIS Asia eNewsletters.