After quietly hyping things up over the past couple of weeks, Spotify had some announcements for us on Tuesday (April 24).
First and foremost, the free tier of Spotify is now more feature-packed than before. Very soon, the free ad-supported version of the app will look and act a lot like what we get with the premium version. That means:
Users will get access to 750 songs through fifteen different Spotify-curated playlists that they can shuffle in any order. Previously, users of the free service weren’t able to listen to certain songs.
Why? Basically, Spotify wants to give away more music in hopes that more people will sign up for the subscription service. At this point, some 60% of Spotify’s users–that’s somewhere around 40 million people–don’t pay for anything. The idea is to give these people a taste of what they could have and then transform them into paying customers.
Another new feature allows users to cut bandwidth use by 75%, handy for those who have been kept away from streaming because of data caps. Given that Canadians pay some of the highest data rates in the world, this could be very tempting.
Now that Spotify has gone public and now answers to shareholders and the stock market, the company needs to beef up revenues. They think this conversion plan is the best shot they’ve got. Plus Apple Music is picking up steam, so Spotify needs to do something to maintain its market dominance.
Music Business Weekly, a site that keeps close tabs on Spotify, talked to Troy Carter, a very smart dude who once managed Lady Gaga.
Over the next few weeks, more on-demand elements will be rolled out for ad-supported users – including the ability to select individual tracks in up to 15 different playlists such as Discover Weekly, Rap Caviar and Today’s Top Hits.
That’s in addition to data-saving benefits, increased personalization and other perks.
Spotify underpinned today’s news with one over-riding key message: with a more generous free tier, we can pinch more of radio’s audience, and then convert them into paying customers.
Some may question, of course, whether giving away more stuff to free users may actually lead to fewer people successfully being up-sold to Spotify Premium.
Troy Carter has no such concerns.
He’s certain – and says Spotify has a “ton of R&D and data” to prove it – that a better ad-funded experience will result in good times for the record industry ahead.
Following his newsworthy appearance at today’s Spotify press conference, MBW sat down with Carter, Spotify’s Global Head of Creator Services, for a wide-ranging interview.
We cover topics such as artist royalties, treatment of independent labels, YouTube, windowing and, naturally enough, the balance of free vs. paid…