Spotify (Basically) Tells Its Free Users, 'Go Pirate!'

from the carrots-taste-better-than-sticks dept

Spotify is pulling the plug on free access to some artists' newest releases, according to The Guardian. Currently, Spotify's 50 million paid users fork over £10/month to play their music offline without ads, but now they're also getting exclusive access to artists' biggest new releases. Meanwhile, Spotify's other 50 million free users have their access suddenly restricted.

This has been a major sticking point with some artists and labels for many years. They've long demanded that some music only be available to paying subscribers because the royalties shared there are much higher. With this new setup -- which Spotify loudly resisted for years -- Spotify benefits by paying fewer royalty fees to record labels, though those fees from free streaming were lower per stream than paid streams anyway. But it's the record labels that pushed this one through:

Labels believe the free tier, which pays lower royalties per stream, can serve to cannibalise other audiences, hitting album sales and lowering the incentive to upgrade to premium.

We've heard this argument before, and too many times. It's always some iteration of the following (choose one from each line):

Bootlegging / piracy / free access / abundance
kills / devalues / cannibalizes
music / movies / books / games / art

Taylor Swift even invoked this argument when she recently pulled her songs from Spotify: "music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free." Of course, Swift's fallacy is equating importance & value with rarity. Water, for example, is critically important and valuable… but also far from rare. Rare things are typically valuable because they are rare, but music that can be copied to every hard drive on the planet at no cost? The polar opposite of rare. Will Spotify yanking access to newer releases actually encourage its free users to upgrade to a premium account? Not likely. As you may remember, the Copia Institute published a report on this very topic called The Carrot or The Stick? Innovation vs. Anti-Piracy Enforcement, and its key findings should be emailed to the CEOs of every record label:

In Sweden, the success of Spotify resulted in a major decline in the file sharing of music on websites like The Pirate Bay. A similar move was not seen in the file sharing of TV shows and movies... until Netflix opened its doors.

In response to rights holder complaints, the Korean government pressured popular music subscription service MelOn to double the price of subscriptions. Since the mandated increase, online music sites have seen a drop in the number of subscriptions as consumers move back to unauthorized means of access.

Strict criminal penalties in Japan for copyright infringement, enacted in 2012, didn’t prevent a steep 17% decline in CD sales, nor spur rapid adoption of streaming music services. Streaming services are starting to catch on in Japan, but only as their selection and convenience have improved significantly.

New Zealand passed the Copyright (Infringing File Sharing) Amendments Act, also known as “Skynet.” After enactment, there was a short-lived drop in illegal downloads over a two-month period (Aug.-Sept. 2011), but after that activity returned to previous levels.

Because Spotify's decision affects 50 million users, this move could create huge waves for both Spotify and the music industry as a whole, since it could encourage users to regress from free (and legal) methods to their familiar free (and illegal) methods. Most everyone knows you can type in "Taylor Swift discography torrent" into Google and get years of Taylor Swift's music in minutes without paying Spotify, record labels, or Taylor Swift. So what will happen when 50 million users you've been slowly leading away from piracy suddenly feel like they've been left out in the cold?

Filed Under: free, music, music streaming, paywalls, windows
Companies: spotify

Reader Comments

The First Word

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  1. icon
    AEIO_ (profile), 1 Apr 2017 @ 9:32am

    It's NOT the music that Spotify is selling...

    It's the organization and easy availability of that music.

    If you know an artist name or name of a song, Spotify can quickly (in a few clicks) bring it up. Not always (Flim and the BB's) but mostly (the album by Hot Butter)

    (OT: Know the actual melody but not the name/artist? Look here.)

    But you get great-sounding music, instantly available on-the-fly. And you don't have to search hard to find and finally download a copy, store it someplace, back it up (on floppies?), copy it to your phone, then find it AGAIN to play it. Like Google, a click or two and it's just THERE! And absolutely no nasty Copyright Infringement Notices either.

    And -- oh yeah -- you can Feel Good(TM) by supporting the artists with a legal copy, but I wonder how much people would ACTUALLY pay for just that. (Taylor Swift thinks it should be more.)

    There's Nothing For You To Do! (Besides the ever-so-minor, I'm socially embarrassed to even have to mention it, let me grovel for a bit, $10/month fee. Why, that's only 90 minutes of minimum wage -- only 1% of your raw salary! What else would you do with the money -- Save? Eat? Pay bills? How pedestrian!)

    So, surprise! If it's worth it to you in relationship to everything else that's available, you purchase. If not, you don't. If the price goes up, more people (probably) won't. If it goes down, they probably will.

    Taylor Swift could help us all out greatly by making LOTS and lots more music -- thus lowering the rarity and price for us all. :-)

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