Spotify might have to create restrictions on its free services to encourage upgrades to paid subscriptions, according to Music Week. This reportedly comes from a proposal from rights holders which would only allow listeners to stream free content for a limited period before they are asked to sign up for a premium deal.
Adhering to this proposal could help Spotify regain the favor of labels and artists who have been critical of the streaming service, including the company’s most notable critic, Taylor Swift. It’s also a significant proposal because Spotify’s deals with Universal Music Group and Sony are set to expire early next year, according to Hits Daily Double.
However, Spotify has not responded to this proposal and has been steadfast on maintaining its price points where they are. Instead, the company has focused on gaining more users. Last month, Spotify founder Daniel Ek commented on the company’s work in a blog post responding to the Taylor Swift news. “On Spotify, free music is supported by ads, and we pay for every play,” he said.
“Until we launched Spotify, there were two economic models for streaming services: all free or all paid, never together, and both models had a fatal flaw,” he added. “We believed that a blended option – or ‘freemium’ model – would build scale and monetization together, ultimately creating a new music economy that gives fans access to the music they love and pays artists fairly for their amazing work. Why link free and paid? Because the hardest thing about selling a music subscription is that most of our competition comes from the tons of free music available just about everywhere.” Time will tell if and how this changes.