I started a discussion about the recent Spotify news over on our Facebook Page and people raised interesting points from both the consumer side and the artist side. If you haven’t heard, Spotify have declared they are cutting back on their ’freemium’ model which means free users are limited to 10 hours of music a month and a limit of 5 plays per song per month. This will be implemented from May 1st 2011.
What??? How dare they! I must admit that was my initial reaction but then I pulled myself together and looked at it from a different point of view.
Naturally when something is taken away from us we get annoyed about it, however Spotify is a business and we have had a good run so far when you think about it.
As a consumer as well as a musician I can understand why users of Spotify might feel disappointed that they are now restricted when using a service that has been free for a while now. It might even persuade me to move to other services that are still free such as Grooveshark which was mentioned over on the Facebook discussion. My personal use of Spotify is mainly due to the convenience rather than the volume of music I could listen to… will you be finding more convenient ways of streaming music now or stick with Spotify?
Making money in the music industry is becoming increasingly hard for artists and illegal downloading is something I don’t see being solved any time soon. Unfortunately the record companies were too slow to take control of it and before they knew it the Internet had opened too many doors for consumers. In my opinion, artists now need to embrace the fact that the traditional way of making money from record sales is no longer feasible as a long term stable income. Artists such as Radiohead have taken this onboard by allowing fans to decide what price they will pay for their music as well as adding bundles of extras along with the purchase of their music.
Take a look at this graph to get an idea of how much money artists actually make from online sales from various outlets. If you scroll down to the bottom you can see that an artist needs 4,053,110 plays per month to earn the minimum wage from Spotify.
Could the change in Spotify rules (brought about by the labels I might add) increase illegal downloading?
Impact on the Music Industry?
I doubt there will be a huge impact on the industry. The structure has changed so much since the birth of the Internet and don’t we know it. Music has never been cheaper yet we complain when it isn’t free! I think because Spotify works well as a streaming service, regular users are likely to subscribe to the premium version because when you break it down, £10 a month for unlimited streaming, no adverts, no restrictions, access offline and on mobiles is really very good.
So is the cut back a bad thing? I think it makes business sense for Spotify and the music labels but artists would rather you bought their music directly from them so they can make enough to keep recording music for you to consume! Consumers might complain at first, but free users will still get 10 hours of free music a month…
What do you think? Have we become a generation of whiners? I shall leave you with one final lighthearted thought.
Graph: Super Duty Tough Work