Is the anger at Spotify’s changes directed in the wrong place?

So it has finally arrived.  The 1st of May.  The day Spotify cuts more savagely than David Cameron.  From today onwards, all free members, regardless of when they signed up will be limited to only 10 hours listening per month and 5 plays of a song… ever!  These changes turn Spotify from music listening service in to a music preview service.  If you want to keep on listening you will have to pay.  In the UK, that means £5-£10 per month (depending on your level of subscription).

Some Spotify members were swift to pass judgement;

So long Spotify. It was nice knowing you. Guess I’ll go back to pirating music again then.”

“Bye Bye Spotify”

“Ah well, it was nice while it lasted.”

Others were more supportive pointing out that even a premium subscription is the equivalent to just one CD a month.  And many were a lot more graphic in telling Spotify where to go!

Users have a right to be angry.  Users have a right to be up-in-arms over these changes to Spotify.  However, much of their anger is directed in the wrong place.  Disgruntled users should not be angry with Mr. Ek and his crew.  Their anger, taunts and complaints should really be targeted with precision at the major record labels.

It is the major record labels who probably have forced Spotify in to this position, no doubt unhappy with the amount they were being paid.  Spotify being the second largest source of digital revenue for them behind iTunes was just not good enough.  I fear once again, the labels have gotten it wrong.  Instead of truly evolving with the digital times, they are trying to choke revenue out of people and many will respond by turning back to piracy instead of paying up.

In recent years there have been some major strides towards finally getting the balance right; finding the right value proposition to turn people away from piracy and towards legal means to get their music.  These changes to Spotify are potentially a step backwards.

There is now one, possibly two, whole generations who are accustomed to getting music instantly and for free.  Music consumption is vital to youth identity, and how you consume music when you are young shapes how you will do it in the future.  I grew up going in to record stores and buying CDs/tapes.  I still prefer to walk around what few records stores are left and purchase there.  It is what I am used to, it is what I am accustomed to.  There is a generation that are accustomed to getting all their music for instantaneously and for free online.   What Spotify Free did was bridge that gap.  They could get the music for free. Instantaneously. And without the stigma of piracy.  Take that away and it is far easier for them to download illegally than it is for them download from iTunes or go to a store, especially so for those under 18s without jobs and unable to get credit cards.

Sending some people back to piracy is not the only problem.  Reducing ad revenues is potentially another.  I would assume Spotify’s ad revenues were relatively healthy.  The reason for their health is probably because Spotify could boast a large, loyal set of listeners, in a very hard to reach demographic who use the service religiously.  By reducing the free service, Spotify’s clout here may be severely neutered.  Which means even less money available to keep labels happy.

The labels are hoping every one of those free members will run out and buy a premium membership (I will be signing up after the 30 day trial – sorry Rough Trade, my Album Club membership was the casualty, times are hard).  Many will.  However, we are in a recession guys – and I fear even more, especially the under 21s, will simply not be prepared to pay for something they can have for free, and have been getting for free their entire lives.

So what should Spotify and the Label boses do next?  Well there is one thing they should be definitely do starting today.  Give free Spotify memberships in its full unrestricted and ad supported glory to under 21s who can prove they are in full time education.

There are a number of reasons why;

  • It will provide a viable and attractive legal option for those most likely to illegally download music
  • It will keep ad revenues healthy.  This is one of the golden groups for advertisers.  They are notoriously hard to reach and savvy at avoiding advertising.  If Spotify can boast books full of these guys, the media agencies will flock to them.
  • This group are time rich yet financially poor.  They have the time to search out music illegally and don’t have the money to pay for music legally.  Post 21, many will move in to full time employment.  They will become time poor yet financially rich(er).  Getting them to pay £10 per month for a service they have been using for years will be far easier.

The music industry’s sole focus should be moving the under-21s away from piracy.  My generation are accustomed to buying music, once downloading became simple we took to it.   The industry needs to forget about the generation below me, you f***ed up; there a lost cause now.  The ones below them are not!

So what’s next.  I am sure in June/July we will see a headline from Spotify announcing a massive increase in premium subscriptions to much fanfare.  However, what will not be announced is the actual numbers of heavy users which will no doubt be massively reduced.

As a premium member I am sure it will be great for a long as it lasts.  However, given the manner of these current changes, I fear that if in 18 months Spotify is not providing serious revenues for the Majors that may be last straw.  We will see Spotify disappear forever.  All that money in subscription and not a single mp3 to show for it!

Rob

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