Spotify: freemium clampdown rumours are ‘completely false’

Spotify has shot down reports that it is set to limit access to its freemium tier to three months per non-paying user.

The rumour began on Thursday from ‘multiple sources’ speaking to Digital Music News.

The site claimed that both Sony and Universal had pushed for an initiative that would see access for current ad-funded Spotify users cut off after six months, with new users kicked off the ‘free’ tier after three months.

In a curt dismissal, a Spotify spokesperson told MBW: “It’s totally false. The model is working.”

DMN is sticking to its guns, claiming that its sources ‘stand by their claims’.

It is now well-known in industry circles that Universal and Sony are pushing for limitations on Spotify’s free tier as a condition of re-signing a licensing deal with the streaming platform.

Warner may or may not be backing this agenda: its CEO Stephen Cooper recently warned the music industry against “burning freemium at the stake”, whilst income from streaming services overtook money coming in from digital downloads at Warner in the first three months of 2015.

Interestingly, the height of Universal’s anti-freemium rhetoric came soon after its full-year 2014 fiscal results, in which its digital income dipped.

UMG boss Lucian Grainge notoriously told the Re/Code conference in March that freemium on-demand services would not be able to “sustain” the music industry in the future.

However, Universal recently posted very strong Q1 digital income – up 8% at constant currency – which it revealed was driven by existing streaming services.

In addition, European regulators are said to be investigating claims that Apple has encouraged the major labels to pressure Spotify into killing or limiting its freemium tier.

Sony has also recorded strong sales of late, despite the industry-wide fall in download sales over the past year.

Thus Spotify claiming… “Our model is working.”

Apple is set to announce its new Spotify rival on June 8.Music Business Worldwide

Related Posts