Home Uncategorized “Without Free, Pay Has Never Succeeded” – Digital Music NewsDigital Music News

“Without Free, Pay Has Never Succeeded” – Digital Music NewsDigital Music News




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From this morning’s Financial Times…


The Spotify business model relies on attracting users to a free
service that offers a selection of music but with limited
functionality, with the aim of converting those users to paying
subscribers. Spotify generates some revenue around the free
service but makes more via paid subscriptions.

A person close to Universal says there was clear
the availability of free music on Spotify was
hurting digital downloads from stores such as Apple’s iTunes.
“The market data really speaks for itself,” the person said.
“It’s clear that the key to success for artists, consumers and
Spotify alike is developing an offering that drives
more free users to the paid tier.

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According to the Spotify says its model is working, and the best
thing the industry has going for it right now.

“Without free, pay has never succeeded,” Jonathan Forster,
who heads the Nordics region for Spotify, told the Financial
Times.  “We’re one of the greenest shoots of growth in
the industry. We don’t want to destabilize that. We think
that this model works.”


Image by Tony Bowden, adapted under Creative Commons
Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0).

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Comments (26)

  1. Sarah

    Monday, March 23, 2015

    Love when company execs talk without actually saying
    anything. “We support what we’re doing.” Oh, hey, thanks
    for clearing up our confusion on that point. :)

    1. LOL… It’s Just Math, Free Doesn’t Pay…

      Monday, March 23, 2015

      Simple Math: Current Music Biz is $7b… how many Spotify
      Subscribers does it take to equal $7b in revenue for
      the record business… 90 Million PAID @ $9.99 a month
      each… It takes 90m PAID to generate $7b in revenue and
      these guys are still fighting for FREE… LOL… My Gawd,
      please get them a calculator quick!


      1. Anonymous

        Monday, March 23, 2015

        Firstly, a large portion of that $7 billion is
        already from Spotify and other streaming services.
        Replacing revenue they are already generating… that
        makes no sense.

        Secondly, why are you expecting a single service to
        generate $7 billion?

        1. It Takes 90 Million PAID…

          Monday, March 23, 2015

          well, it doesn’t matter if it’s spotify or
          spotify and _______. If as many like to say
          “streaming is the future” as is “access over
          ownership” then these subscription models need
          to have 90 million paid subscribers at $9.99 a
          month to generate the revenue we have now… of
          course, we can keep the free tier and lose
          another BILLION dollars a year in cannibalized

  2. Versus

    Monday, March 23, 2015

    ““Without free, pay has never succeeded.”


    Pay without free has not even been tried in the digital
    age, since free (legal or illegal) was always there. It
    would work if piracy were controlled, and other free
    pseudo-piracy options (YouTube etc) were force to go legit.

    Furthermore, pre-digital, the original recording industry
    model was precisely and only “pay without free”. Before
    home taping (also illegal), the only option was to pay for
    the record. There was no “free tier”.

    1. Anonymous

      Monday, March 23, 2015

      Exactly, someone’s memory apparently only goes back a

      Tired of this bullshit. Either repeal copyright law or
      enforce it. Stop letting politicians get bought off by

    2. Anonymous

      Monday, March 23, 2015

      Well since piracy can’t be controlled there is no point
      in bringing this up.

      1. David

        Monday, March 23, 2015

        ‘Controlling piracy’ hasn’t been tried. Oh, wait,
        there was something called SOPA. That might have
        done some good, but the tech lobby and their media
        shills killed it off before it was even debated.

        1. Anonymous

          Monday, March 23, 2015

          Might* have done some good. It very well might
          not have because it was a poorly written piece
          of crap that should never have been proposed.

          The first step to stopping piracy is to admit
          we can’t stop piracy. The second step is to
          reform copyright. That means making changes
          that benefit both the copyright holder and
          everyone else. As long as we keep trying
          half-ass attempts to pass legislation that only
          alters copyright enforcement to benefit one
          side (to the extreme in the case of SOPA) then
          we will continue run into walls and get

          1. David

            Monday, March 23, 2015

            You seem to have swallowed the propaganda
            against SOPA. There was nothing wrong with
            it that could not have been easily amended
            through the normal legislative process –
            which is what it never got, because Google
            whipped up an online lynch mob.

            1. Sarah

              Monday, March 23, 2015

              easily amended through the normal
              legislative process

              That statement is a shocking
              oversimplification. When you’re talking
              about massive legislative and
              regulatory changes in an area with a
              large number of very motivated,
              powerful lobbyists, and that also
              affects most ordinary people, there’s
              nothing “easy” about it – as you saw
              when SOPA got killed. If you want to go
              through the legislative process, fine,
              but you have to accept that it’s just a
              political game and that means that
              “what’s right” isn’t nearly as relevant
              as “who has the most power and what do
              they want?”

              RepX addresses piracy from the market
              side by setting up a system where
              paying is actually a more appealing
              choice for the typical consumer than
              stealing (no, it won’t eliminate piracy
              but if total elimination is your goal,
              you’re simply being unrealistic). It’s
              definitely hard but it’s doable, and
              it’s way more attainable than
              any “easy legislative changes” on this

  3. GGG

    Monday, March 23, 2015

    The problem is there is barely limited functionality. They
    could speed up this whole conversion thing with some pretty
    easy, not to mention normal on plenty of other services
    (music and otherwise so people are already used to it),

    1. Casey

      Monday, March 23, 2015

      At this point I think if they made a new PC client that
      didn’t suck and made it premium-only they could add a
      million subscribers in the same day. Ok maybe not, but
      I honestly can’t think of one thing they have done to
      increase the value of their premium service over the
      free service since it launched in the US. In fact I
      would argue they have decreased the value of the
      premium service by adding so many free features.

      This company really is starting to look like they
      really don’t know how to manage their own product.
      Their marketing sucks. Their software sucks. Their
      industry relations are looking increasingly sucky. They
      are really opening the door for a competitor like Apple
      to come in and undo everything they have done.

      1. jw

        Monday, March 23, 2015

        Am I the only person who really likes Spotify’s
        software? Sure, it’s got it’s flaws (managing lots
        of playlists, notifications), but I can’t think of
        a playback software I’d rather use for OSX or
        Android. Certainly not iTunes or Beats or any of
        the other streaming services that don’t support
        local file playback.

  4. Anonymous

    Monday, March 23, 2015

    “Universal says there was clear evidence the availability
    of free music on Spotify was hurting digital downloads from
    stores such as Apple’s iTunes.”

    This makes it sounds like if they turn off the Spotify free
    tier then download sales would come back–showing a
    continued fundamental lack of understanding of what is
    going on here. The problem is not streaming services. The
    problem is that smartphones and always-connected devices
    have changed consumer behavior. Apple made the digital
    media download obsolete with the advent of the iPhone.

    As always-connected culture spreads and becomes more and
    more reliable, fewer and fewer people will ever consider
    downloading individual media files to their devices. And
    that has nothing to do with music streaming, much less any
    particular tier of a single music streaming service.

  5. dommusicguy

    Monday, March 23, 2015

    either take the money you get from me listening to you on
    Spotify or don’t take any money from me and I’ll go back to
    downloading music for free

    1. lick my k o

      Monday, March 23, 2015

      yawn.. your threats are sooooo fuggin hollow at this
      point. maybe 15 years ago, but give it up already, you
      suck, and your momma agrees

  6. Yep

    Monday, March 23, 2015

    maybe restricting some content to the paid service is a
    good idea. I suspect though that a lot of users will just
    jump to YouTube to listen.

    Restricting listening time might make more sense. Maybe, a
    one off ‘top up’ like data charges then a low, limited

    It’s a tricky one. There are valid point on both sides.

    1. Paul Resnikoff

      Monday, March 23, 2015

      It looks like that’s what UMG may be angling for, but
      that result still makes little sense when viewed in the
      broader service eco-system. Consider, for a moment, a
      more restricted freemium Spotify:

      (a) ‘Less free’ Spotify; more caps and limitations
      (b) Paid-only Apple-relaunched Beats
      (c) Totally free YouTube (w/ some paid on YT Music
      (d) Grooveshark (still alive)
      (e) Soundcloud
      (f) BitTorrent

      If that makes sense to anyone, I’d love to hear why.

      1. It Makes Sense… Like VOD…

        Monday, March 23, 2015

        Paul – it makes sense in the same way the film and
        television industries are not operating in a state
        of perpetual Stockholm Syndrome when it comes to

        Film and TV have transactional streaming (VOD) they
        have transactional downloads (Itunes), they have
        limited subscriptions (Netflix) and they have an ad
        supported / subscription hybrid (Hulu).

        Assuming that piracy must be eliminated or there’s
        no point in charging for new models is a false

        Sure, it’s not ideal – but we’re a long way from
        anything that is ideal. In the meantime we
        need to focus on honest business models targeted to
        honest consumers.

  7. Anonymous

    Monday, March 23, 2015

    I don’t get why Spotify isn’t being more aggressive with
    its advertising. I listen to the free spotify all the time
    and the only ads I ever hear are to upgrade to premium,
    which nets them zero dollars because I won’t be signing up
    anytime soon. Why aren’t they beaming targeted
    advertisements to me? They know my location, have my
    facebook information (I use facebook to login), my musical
    tastes, etc. Imagine an artist is playing a show in town
    and is able to advertise to every Spotify user that has
    listened to one of their songs in the last week in that
    town about their upcoming show? Or a local shot can
    advertise to anyone listening to Spotify in the surrounding
    area. The potential for advertising is endless, yet I have
    yet to hear anything targeted to my listener profile.

    1. Sarah

      Monday, March 23, 2015

      Hmmm….. that’s actually an interesting proposition:

      Artist, pay to advertise for your upcoming show on
      Spotify so you can then get paid from the advertising
      revenue we get from you.

      Flow of money in this scenario:
      artist (makes payments as advertiser)–> Spotify
      –> artist (earns payments as royalties).

      You really need third party advertisers to make the
      ad-supported model produce revenue for artists. But
      yes, you’re right that they should be drastically
      improving their targeting.

  8. Anonymous

    Monday, March 23, 2015


    i want my money for nothing, my rent for nothing, my food
    for nothing, my toiletries for nothing, my chiropractor, my
    masseuse, my drugs, my everything for nothing, such a big
    deal over tiny wee digital files of something that is
    everywhere, and yet never anyone anywhere ever talking
    about how free rent is good or how free food is good, and
    not just a little cracker in a grocery store, i want all my
    food for free, heck, put a damn camera in my house and
    track and spy and watch everything i do, in exchange for
    free rent and food and everything, forget a dang facebook
    and google in a lame one sided trade off, cmnon now!!!

    best digital album ever, the first one, now that aint


  9. JTVDigital

    Monday, March 23, 2015

    “there was clear evidence the availability of free music on
    Spotify was hurting digital downloads”
    “Hurting” to what level?
    As long as these people will stick to the simplistic “free
    vs. paid” thing, they’ll keep on missing the point.This is
    about consumers’ behavior, demographics, musical tastes,
    demand, ergonomy, user experience, etc.
    Nothing to do with streaming vs. download or free vs. paid.

  10. obama

    Monday, March 23, 2015

    nobody needs spotify. f… it!

    1. Jonas

      Monday, March 23, 2015

      @Obama Yeah




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