Spotify: Not so free as it was

Bad news today for millions who've relied on Spotify for free music. The streaming service announced that it was putting a cap on their access to its huge library of music - they will only be able to listen for a maximum of 10 hours a month, and can listen to any single track no more than five times.

Cue anguish on social networks - "what fresh hell is this?", "weeps", "noooooo", and "Limewire (the file-sharing site) makes a reappearance" were among the comments I received.

But I'm hearing that Spotify had the move forced upon it by the record labels and the move reflects continuing tension between the fast-growing digital service and the music industry.

It seems that the original licensing deals which enabled Spotify to get off the ground a couple of years ago are coming to an end - and some of the labels in some European countries are getting restless about how much of their content is being given away for free, with minimal fees in return. Yes, 15% of Spotify's users are now paying customers, but as the service grows, millions of tracks are being played for nothing.

As someone put it to me, "the guy whose bonus still depends on CD sales is cutting up rough".

And it's worth remembering that Spotify is locked in a seemingly endless round of negotiations with those same labels about launching in the United States. Against that background, the streaming service has apparently decided to allay some of the concerns by putting strict curbs on what users can get for free.

I ran some of this past the respected music industry analyst Mark Mulligan. He said it seemed a plausible scenario, with the record labels still thrashing around in desperation as they try to work out how to make profits in the digital age.

"The industry is in trouble, downloads aren't working, CD sales continue to plummet, and Spotify was an easy target."

But he also thought that it was convenient for Spotify to blame the labels:

"Their own numbers still aren't adding up - they may have needed to do this anyway."

The record labels, for their part, know they need to support new digital services. After all, Spotify has persuaded one million people across Europe, most of them pretty young, to pay for music, something the labels find ever harder.

Spotify and the record labels are locked in a marriage that neither seems to be enjoying - but each needs the other if they are to survive into a profitable future.

Source: http://www.bbc.co.uk/blogs/thereporters/rorycellanjones/2011/04/spotify_not_so_free_as_it_was.html

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