The Wall Street Journal has reported that the music streaming service Spotify will launch a free, ad-supported service next year. This means that, rather than having to pay the £9.99 a month subscription service, users will be able to stream their music selections to their mobile devices in exchange for the occasional annoying ad and limited music selections. This mirrors the current ad-supported service that they offer on laptops and desktops, and could help the company to persuade users to move over to their paid service from the free service.
Spotify is a music streaming service that offers a subscription based model to listeners. By paying £9.99 a month, it is possible to stream and listen to any of the songs that are found on the service. It is a convenient means of listening to music, and one that the company founders have said can help to prevent people from illegally downloading music. However, bands and artists have hit out at the service recently.
Thom Yorke, of Radiohead, removed two of his solo albums from the site, saying that the royalties paid by the service are not good enough. In transpires that Spotify pays $0.007 per listen of a track to artists, and this means that even if a major artist has their track streamed 1 million times they will only earn $7,000, equivalent to less than £4,300. New and upcoming artists will not get anywhere near this kind of level, and artists have hit out at the pittance that they get paid.
Spotify has recently negotiated deals with three of the major labels that publish and produce the songs that they sell. These negotiations were said to be over the amount that they paid artists, and how users would be able to control the music choices that they are able to listen to. The new mobile streaming service is likely to start in the next week.
The company said that, although they only pay $0.007 per play to artists, this is equivalent to around 70% of the revenue that they earn from subscription fees and advertising. They also said that it still represents a greater return than if users were to turn to illegally downloading music, because artists would not receive any of that figure.
US band The National have said that they expect minimal earnings from the site, but will continue to use it as long as listeners are being exposed to the band’s music and it is encouraging them to attend gigs and buy CDs.