When Taylor Swift made the decision to pull all her music from Spotify's streaming service, she was making a statement about how harmful Spotify's economic model is for artists. Most artists make less than a cent per song stream, which is not enough to keep them going (at least when compared to how much they make from selling albums). While there are some who believe that Spotify helped bolster the music market, some record companies are done with Spotify's low rates.
Universal Music Group is urging Spotify to place a limit on how many songs the "freemium" accounts on Spotify can stream, reports the Financial Times. FT's unnamed source said that "It's clear that the key to success for artists, consumers and Spotify alike is developing an offering that drives more free users to the paid tier."
This isn't the first time that record labels have argued for Spotify to place tougher limits on free Spotify users. Sony Music and Warner Music have both attempted to get Spotify to change the account limits, but Spotify has repeatedly stated that it believes that if it increased limits, it would end up slowing down the conversion rate of free accounts to paid, as well as turning millions to using YouTube and pirated music over Spotify. "Spotify is monetising people who have never been monetised before," the music streaming service told FT.
Specifically, Universal is asking Spotify to cap the amount of time that users of Spotify free accounts have before they are required to upgrade their accounts.
Most music labels were big supporters of music streaming at first. However, as digital sales decreased, the labels have changed their position on Spotify, The Verge reports.
While Spotify's revenue grew to more than a billion dollars in 2013, and its user base grew to 60 million users in 2014, the streaming service has not been able to make a profit.
