The Universal Music disc label requires restrictions on free streaming via Spotify. Currently the music giant is in contract negotiations with the streaming service and calls for a new concept that will lead more free-of-charge users to the paid services.
To date, Spotify has funded the free version via advertising inserts, but according to Universal, an ad-supported music player can not satisfy artists or investors in the long term. The music label also indicates that Spotify's gratism reduces the downloads on iTunes and other vendors. Universal therefore calls for the free time to be limited.
However, in an interview with the Financial Times, Jonathan Forster, head of the Nordics region at Spotify, contends that paid services would not work without free services. The free version is also subject to several restrictions: Individual songs can not be specifically selected and only a limited number of titles can be skipped. According to Spotify, a limitation of the usage time leads only to fewer users to switch to paid services and to increase illegal downloads.
In addition to Universal Music, other large record labels such as Sony Music and Warner Music also demand a stronger separation between free and paid services. In addition to time constraints, restrictions on the catalog for non-paying users would be possible. For the time being, Spotify is committed to its freemium strategy. The streaming service currently counts around 60 million users, of which one in four uses paid services.
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