THE UNLIMITED FREE RIDE ON SPOTIFY COMES TO AN END

Spotify’s “freemium” model has been a boon to music fans but a bane to record companies. As well-chronicled on this site, certain record labels have had a problem with Spotify’s low payout rates to labels and artists, made necessary not because the head cats at Spotify are a bunch of penny-pinchers but because the vast majority of subscribers are signed up for the free version instead of the $5 or $10 per month models. That might be about to change, as a limitation on free Spotify accounts that’s been in Spotify’s Terms of Service from the get-go is about to kick in, hopefully pushing more customers towards a paid subscription.

The provision will affect any user who’s been signed up for the free version of Spotify for six full months, and it will limit a user’s music consumption to 10 listening hours per month with a cap of 5 plays per track. 10 free monthly hours is still plenty and it’s probably more than the casual Spotify subscriber needs, but people who are really digging in and enjoying all the service has to offer are probably going to want to splurge for a paid subscription. At $5 per month (and $10 if you want mobile access too), close to all the music in the world still feels like a crazy steal to me; that’s less than the cost of just one pint of good beer in just about any bar in NYC. My hope is that the six-month limitation (which, again, has always been part of Spotify’s TOS but is just now set to kick in for the first people who signed up) will drive more people towards a paid model, increasing revenue for Spotify and allowing them to raise artist royalties, which will in turn bring labels like Century, Metal Blade, Prosthetic and Sumerian back onto Spotify.

We’ll see how this plays out. It should be interesting. New free Spotify users will still get their six months of unlimited streaming before these limitations begin. If the user experience is as strong as everyone says it is, people aren’t going to be able to resist plunking down a measly $5 when that pop-up window shows up saying they’ve reached their monthly limit.

-VN