Music streaming giant Spotify has begun testing a new feature that restricts access to song lyrics to its Premium subscribers.
A recent change in the Spotify app has caught the attention of users, as lyrics that typically accompany songs have become inaccessible for free users.
Instead, a notification bubble displaying the message “Enjoy lyrics on Spotify Premium,” now appears, accompanied by a link to upgrade to the Premium subscription, according to a Reddit thread.
In response to inquiries about this change, Spotify confirmed to The Verge that it is conducting a test of this feature.
“At Spotify, we routinely conduct a number of tests, some of those tests end up paving the way for our broader user experience and others serve only as an important learning,” CJ Stanley, Spotify’s co-head of global communications, was quoted by the newswire as saying.
“At Spotify, we routinely conduct a number of tests, some of those tests end up paving the way for our broader user experience and others serve only as an important learning.”
CJ Stanley, Spotify
Stanley further mentioned that the test is being carried out in a limited number of markets, without specifying which markets, the number of users involved, or the duration of the test.
While it remains uncertain whether Spotify will ultimately reintroduce lyrics for free users, it is evident that the company is actively exploring ways to attract users to subscribe to its Premium service.
After investing heavily in podcasts and audiobooks with limited success, Spotify appears to have shifted its focus away from exclusive content and toward the development of other Premium features. This change in strategy comes as the cost of Premium subscriptions, like those of many other streaming services, continues to rise.
In July, after 12 years, Spotify finally raised the price of its flagship individual Premium subscription price in the United States to USD $10.00 per month from $9.99. It also increased the price of its other subscription plans in the US including its Family Plan that was raised to $16.99 per month from $15.99.
If Spotify proceeds with the plan to gate lyrics behind a paywall, it would represent the platform’s latest addition to its suite of Premium-exclusive features, following the introduction of the personalized ‘DJ’ feature powered by artificial intelligence, as well as the concept of ‘locked’ audiobooks, accessible only through additional purchases.
This move comes as Spotify intensifies its efforts to bolster revenue and profitability in the face of heightened competition and a global slowdown in advertising spending.
Less than a month ago, Bloomberg reported that Spotify is considering restrictions on white noise podcasts due to their inadvertent promotion by the platform’s algorithm, potentially impacting regular talk feeds. This strategy would reportedly boost the company’s annual profit by up to $38 million.
A move away from its ‘freemium’ model (or a business model that offers a basic version of a product or service for free, while also providing a premium or paid version with additional features or benefits) signifies a potential departure from Spotify’s earlier advocacy for its ad-supported free tier. CEO Daniel Ek had previously touted this model as the future of the music industry in 2015.
“We’re getting better and better at giving upcoming artists exposure on the service and creating tools to give those new artists a way to market themselves. In the future, people will listen to more music from a bigger variety of artists,” Ek told The Observer in 2015.
“And if we build the revenue model around ‘freemium’, the music industry will be much larger than it’s ever been before, more artists will be able to make a living by being artists and more people will listen in turn.”
In the second quarter, Spotify’s Premium subscriber base ballooned by 10 million to reach 220 million paying users. Total global Monthly Active Users (MAUs) jumped 27% YoY to 551 million, and up 7% from the first quarter.
Revenue from its Premium tier surged 14% YoY to €2.773 billion (approx. USD$2.98 billion), while ad-supported revenue rose 15% to €404 million ($433.7mn).
Music Business Worldwide