The world’s biggest music label, Universal Music Group, is said to be in dispute with Spotify over the streaming service’s free tier.
It seems as if Universal no longer thinks there’s enough differentiation between Spotify’s free and paid subscription models.
Currently, it’s possible to listen to unlimited free music through Spotify’s ad-funded free tier. Those who pay £9.99 per month get to ditch the ads, download tracks for offline listening, and access their accounts on mobile devices.
Universal doesn’t want the free tier scrapped altogether, according to sources of the Financial Times. Rather, the music label wants Spotify to change the balance between its two models, perhaps by limiting the amount of time the free service can be used.
The report claims that Universal is using license negotiations to push for these changes.
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At the heart of this disagreement, there appears to be some disagreement over the service Spotify is performing. One source close to Universal claims that Spotify’s free service is directly harming music sales through traditional download services like iTunes.
It’s a charge that Spotify rejects, however, claiming that only 12 per cent of former iTunes users are on Spotify, and that more than 40 percent of those are on the paid service.
In Spotify’s defence, the report quotes several music industry figures as stating that no other streaming music service converts more of its users from free to paid tiers. Indeed, one of the most popular sources of music, YouTube, doesn’t place any restrictions on its free service – though it does now have the enhanced and ad-free YouTube Music Key.