The company is reportedly testing several different methods of making content available to only paying subscribers, according to Digital Music News (DMN). The claim is based on “preliminary details” shared by its sources.
One potential model would make certain high-profile new releases only available to premium members. An alternative solution would allow free users to listen to only a couple of tracks from an album, encouraging them to pay up to hear the rest.
This idea was expressed by a source “close to the negotiations” who told DMN: “They want the free users to feel like they’re missing something, not just forced to listen to ads.”
The model was tested earlier this year on Muse’s 10-minute song The Globalist from the album Drones. Only premium subscribers can play the track.
The objective is for there to be greater incentive for a free user to move up to the paying premium tier while creating more revenue for the most popular artists. The removal of free streaming seems to be a major factor in the company’s contract negotiations with all three big labels, Sony Music Entertainment, Warner Music Group and Universal Music Group, due for renewal in two months.
The labels are pushing Spotify towards a premium-only model, something that CEO Daniel Ek is known to disapprove of. Since its formation, the service has steadfastly maintained the ability for a user to listen without paying anything but it may now have to “give an inch” if it wants to retain its contracts, according to DMN citing a source “close to the negotiations.”
Only 20 to 30 million of Spotify’s 75 million users are thought to be paying subscribers. Rival Pandora fares even worse with just 5 million of 80 million actually paying up.
Apple Music is only available as a subscription past its three-month free trial while Microsoft’s newly rebranded Groove Music is also subscription-only after a one-month trial. The then Xbox Music abandoned its free streaming option late last year.
If Spotify makes the move to premium-only then it will be leaving behind very few options for those who wish to stream music for free over the Internet. With artists looking for more revenue and labels demanding it on their behalf, even Spotify may be forced to admit defeat over free streaming if it wants contracts renewed in October.
