If you've been following us for a while, you know I am a big proponent of the Spotify music service, who's been based in Europe for a while now but has been trying to make its way over to the States. Recently, I talked about how they were inching closer and closer but were just waiting on Warner Bros. to really get things going. Well, we also knew that they had an awesome free service with 20 hours of listening and very limited ads. Unfortunately, just as we see Spotify docking into a US port, they have cut some of the awesomeness out of their free service. 20 hours have gone down to 10 per month and free users can only play a track five times. No reason from Spotify as to why, but we feel it's because of the major record labels making sure Spotify boosts their paid subscription rate.
There's a couple of key points to note here. First, the change will happen at different times for different users, dependent on when they signed up. Brand new users signing up now (and those who signed up after November 1st of last year) will get 100% unlimited service for 6 months, then limited to the 10 hour/5 plays a track deal. Anyone who signed up November 1st or earlier will have the switch happen on May 1st.
More on the details and what this means after the break.
Also, Spotify did go on record to say their £9.99 premium and £4.99 unlimited tiers wouldn't be changed and they also tried to explain that the free changes aren't necessarily bad.
The average user won't reach the limit on plays for 7 out of 10 tracks, after a year of using Spotify. Above all, this means we can continue making Spotify available to all in the long-term.
Long-term is what everyone wants, especially after word has gotten around that Last.fm has limited some things on their free service to mobile devices. Obviously, we know that this is all a move to make more people switch to a paid option. Only one million out of their ten million users are paying the company, and they definitely need to get that rate to increase by two or three-fold. Spotify has a great service that is a hybrid of all of our favorite US companies and could really make an impact if they could pull off a large conversion.
Financial Times is reporting that the pressure may have come directly from the labels. Apparently some of the companies may have shown Spotify some figures that indicated their current free-heavy model wouldn't have held up for much longer.
Spotify desperately wants to show labels high levels of conversion and will get higher levels of conversion by ratcheting back free.
In the end, though, Spotify has nabbed two of the four major labels in the US needed to make this launch happen. It's been taking a long time so far so they're going to need to speed things up to not fall into the pile of music companies out there, especially with Amazon's Cloud music service and rumors (for years now) of Google's record label/music player combo.