Major labels pressure Spotify to restrict free users

Universal are reportedly trying to persuade the streaming service to drop their 'freemium' model

Major record labels are allegedly pressuring music streaming services like Spotify to drop their ‘freemium’ model.

Currently users can sign up for a free, ad-funded account to stream music via Spotify, however, the likes of Universal want this to change. As the Financial Times report, the label are using their licence negotiations with the platform to persuade the company to charge users.

Labels claim that free usage of streaming services are harming music sales, both digitally and physically. Universal Music CEO Lucian Grainge has criticised ‘freemium’ platforms in the past, saying: “Ad-funded on-demand is not going to sustain the entire ecosystem of the creators as well as the investors.”

However, Spotify are reluctant to resist free users as it could decrease their audience base. Spotify’s Jonathan Foster has said: “Without free, pay has never succeeded. We’re one of the greenest shoots of growth in the industry. We don’t want to destabilise that. We think that this model works.”

Meanwhile, Kendrick Lamar’s ‘To Pimp A Butterfly’ album recently broke the global Spotify record for the number of streams in a day. The album was released by surprise earlier this week (March 16). ‘To Pimp A Butterfly’ came out simultaneously on iTunes and Spotify with 9.6m people listening to the album via the streaming service on the first day alone.

This figure broke Spotify’s global streaming record, a record previously held by Michael Bublé album ‘Christmas’ on Christmas Eve 2014.
https://link.brightcove.com/services/player/?bctid=2732434420001