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


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  1. icon
    That Anonymous Coward (profile), 31 Mar 2017 @ 12:11pm

    I await the press release form next week about how Spotify, is stealing even more money from artists.

    Somehow the RIAA managed to maintain power & relevance when their 'work' is about the same as ice delivery men for ice boxes.

    Dear artists,

    The RIAA is lying to you. Your label is lying to you.
    You are making money, but your shitty contract allows them to rob you blind. They support 'rights' societies that use royalties due to you as personal piggy banks.

    We aren't going to pay you $5 each time we hear a song.
    How much do you get for each YT hit or radio play?
    Why should another format pay you more? Because they manage to make a profit?

    If the RIAA cared about you why did everyone else do the work to build streaming, YT, music sales? For the cut they and the labels take shouldn't they do more?

    Enjoy making less money as you get less coverage & less likely to be discovered by new fans. Be sure to blame everyone except yourself for this drop. Music has changed, and the writings been on the wall for years. You should never expect to make the same amount you get for a plastic disc as a digital file that costs next to nothing to sell.

    You don't need the gatekeepers and the sooner you figure this out & demand better contracts or leave the gatekeepers in the past where they belong the sooner you will make more.

    The internet doesn't have to be your enemy, look at the huge acts who use nothing more than social media & YT to build a following. Maybe stop taking advice from people who tell you the sky is falling, while increasing their cut of your profits.

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