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Spotify being pressured by record industry to limit free music streams

UMG wants to pressure Spotify to make adjustments so more users transition from free members to paying subscribers
By: Michael Hatamoto | Business, Financial & Legal News | Posted: Mar 22, 2015 12:47 am

The Universal Music Group isn't a big fan of Spotify's "freemium" model that allows its users to listen to ad-supported music for free. Spotify has previously noted a growing number of free subscribers end up turning into $10 per month paid users - but UMG wants to pressure Spotify in current contract negotiations to further limit free service.




"Ad-funded on-demand is not going to sustain the entire ecosystem of the creators as well as the investors," said Lucian Grainge, chairman and CEO of UMG, in a statement last month. Other music companies also want to see changes made to the current ad-supported free radio services - especially as more users go mobile.


The record industry has struggled to try to keep up with modern times, and its fight against online radio is nothing new. However, it is trying to find new ways to put pressure on Pandora and Spotify, despite both services noting how many paying subscribers they now have.


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