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As Taylor Swift goes, so goes just about everybody else.
Last fall, Taylor Swift shut out music-streaming services like Spotify from the release of her latest album. This week, it seems like the big labels are finally, if a little slowly, paying attention.
On Friday, Universal Music told the Financial Times they’re pressuring Spotify to curtail the features offered in its free version. Universal is hoping stricter limits will convert more listeners to paying subscribers.
Rather unsurprisingly, this move comes after last month’s Billboard report that Spotify was the driving force behind Universal’s 75% bump in streaming revenue for 2014.
Currently, Spotify offers unlimited on-demand streaming on computers, but limits mobile devices to a randomized, more Pandora-like service. Paid subscribers (full disclosure: that includes me) hear no ads and get access to things like higher-quality streams and offline access.
But with Universal’s latest comments, the heads of all three (yes, there are now only three) major music labels have said there isn’t enough difference between paid and “freemium” services.
Industry sources told Rolling Stone “We need to accelerate the growth of paying subscribers — that’s a slightly more positive way of saying we need to limit free. You can make the subscription service more attractive, with high-resolution sound or exclusive albums, or you can make the free version worse, by limiting the amount of stuff you can listen to.”
Spotify has long said that a robust free service is the only proven way to convert users to paid subscribers. At a 2013 conference unveiling Spotify’s newly unlimited mobile services, CEO Daniel Ek said “We’re giving people the best free music experience in the history of the smartphone. And the more you play, the more likely you are to pay.”
As the market shifts away from physical sales and downloads, the recording industry will increasingly apply pressure to the scope of freebies allowed by Spotify. The RIAA recently announced that in the US alone, 7.7 million paying subscribers across all platforms accounted for $800 million in revenue for labels. Additionally, ad-supported streaming accounted for $295 million in revenue.
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