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Spotify mounted a defense of its free tier Tuesday, saying music with no upfront cost is good for both artists and fans.
Troy Carter, an executive who acts as Spotify’s liaison with the music industry, compared paid and free listening to how musicians sell high-priced front-row tickets as well as cheap nose-bleed seats to their concerts.
“I don’t think we’re ever going to get to a world where everybody on the planet is going to pay for music,” he said. A user listening free with ads “may never convert to a paid subscriber…but they’ll be able to afford a concert ticket, they’ll be able to afford a t-shirt.”
Spotify’s free tier has been instrumental to its leader in the race to rule subscription streaming music. Unlike competitors like Apple and Tidal, anyone can listen to any song on Spotify’s service without signing up for a membership so long as the music is interrupted by occasional ads. Some artists like Taylor Swift protest that the free tier devalues their music; she pulled her catalog off Spotify in 2014.
Spotify’s chief strategy officer and chief content officer, Stefan Blom, rebutted the idea that the free tier is giving music away.
“Someone is paying for the consumption,” he said, referring to brand and advertiser payments. “We monetize it, we monetize it well.”
The executives were speaking at The Wall Street Journal’s WSJD conference Tuesday.
Suspicion arose that the music industry had soured on the concept of free tiers, as labels and publishers struck deals with rival services without ad-supported options. But with the recording industry posting its strongest revenue growth since the late 1990s, and with Spotify the worldwide leader in subscriptions at 40 million paid members, worries have eased that the free tier’s days are numbered.
Blom also said Spotify would invest more in original videos and exclusives with artists as marketing tools. But Carter dismissed the notion that Spotify would begin pursuing the kind of high-profile album exclusives that have been the hallmark of Apple Music and Tidal.
