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Spotify under fire for 'silly' free streaming model by Rdio executive

Shots fired at Spotify!

By Michael Hatamoto from Jun 30, 2015 @ 12:25 CDT

Spotify offers a free membership and $9.99 per month subscription to its popular music service, but the No. 1 streaming service is effectively cannibalizing the industry, according to Rdio CEO Anthony Bay.

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"The idea that giving it away for free leads more people to buy is flawed. You will convert a large number of people who would normally pay for something to the free service," Bay recently told CNBC.

Rdio has a free offer to stream radio stations, $3.99 stripped down tier, and $9.99 per month unlimited version as it offers radio and streaming stations. Unlike Spotify, music listeners don't control the music they listen to - but can purchase songs if they like it. However, Spotify is willing to be patient and wait for free users to upgrade to the paid subscription:

"What they are all trying for is user acquisition, it's a land grab for users. A lot aren't focused on immediate profitability. That will come after users increase," said Jack Kent, senior mobile analyst at HIS, in a statement to the CNBC.

NEWS SOURCES:Cnbc.com, Wundergroundmusic.com


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