Take Spotify, the popular music streaming service. Nonpaying Spotify consumers can play any artist’s catalog on the app, so long as they shuffle the songs. On laptops and tablets, nonpaying members can listen to any song–though there are ads. It is only Spotify’s 12.5 million customers who pay a monthly fee that can listen to any song without ads (compared with the 37.5 million who use Spotify for free).
But record labels who agreed to this system are starting to feel differently going into the next round of licensing negotiations.
Labels want streaming services to cut back on free trial periods and up the ad load, driving people into subscriptions, and thus making them more lucrative customers for the music industry.
Streaming services, on the other hand, worry that cutting back on the free services would stifle their growth. This battle was at the center of pop star Taylor Swift’s high-profile duel with Spotify. Swift wanted her new album “1989” to be available only to paying subscribers, while Spotify said it would be made available to all users. Swift ended up yanking her entire catalog from Spotify as a result, a move that portends just how heated this fight might become.
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