A new Financial Times report claims that Spotify is negotiating a major shift in its service, ahead of a planned IPO. In exchange for lowering the royalty rate paid out to music companies, Spotify will only allow paid subscribers to access its “biggest album releases” for a period of unspecified exclusivity. FT reports the deal is intended to push users of Spotify’s free service to finally subscribe, as paid subscriptions generate more revenue for the labels.
Spotify is currently negotiating with Universal, Sony, and Warner, the “big three” record labels, who also own minority stakes in the streaming service, and would presumably benefit. The report doesn’t specify which albums would be initially withheld from free users, but it isn’t difficult to imagine the major labels deciding to put its most prominent albums behind a paywall. If the development alarms you, the freemium user, don’t fret just yet: FT says all this is being reported “with the caveat that nothing has been signed and talks could again stall.”
Most notably, Taylor Swift withheld her music from Spotify over concerns regarding the royalty rate.