Spotify, the leading music streaming service, is reportedly facing pressure form Universal Music to limit its free streaming service so that more users subscribe to premium service. Universal Music Group, the largest in the industry, is demanding changes in terms of the amount of Spotify free streaming music users can listen to. While this change might not be very welcome by the users, it will definitely increase royalty payments for bands and individual artists. Artists signed with Sugo Music will receive full benefits when this occurs because because we distribute music to Spotify, as well as all other major music streaming services.
For past few months, Spotify is struggling with a string of incidents challenging its business model that started last year when Taylor Swift removed all her songs from Spotify, arguing that musicians are being undervalued as Spotify is allowing users listen to their songs for free.
"It's my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album's price point is," Swift said after the release of her latest album 1989. "I hope they don't underestimate themselves or undervalue their art", she added.
Spotify, a Sweden-bound startup, currently has over 60 million users including 15 million paying for the premium service among them. Spotify is yet to acknowledge any future change in its free streaming aspect, arguing that such change will negatively impact the conversion from free to paying users.
On the other hand, Lucian Grainge, the CEO of Universal Music, stated in the Recode conference last month that the entire music business needs to accelerate paid subscription to ensure sustainability of music creators.
Under the current model of Spotify, a user can listen to as much free music as they want for an unlimited period of time. However, free members cannot choose tracks on the mobile app of Spotify as well as they cannot listen to music offline.
Source: The Independent