For a limited-time, Sweden-based music company, Spotify, will offer a free ad-supported version of its service on mobile devices that, until now, was available only on desktop and laptop computers.
WSJ reporter Hannah Karp says Spotify has struck deals with the labels but mobile users will only be able to play a limited number of songs on-demand with recommendations based on user input, similar to Pandora.
Techcrunch learned that on-demand access will be less restricted if users listen to previously created playlists or collections, and estimated that Spotify might consider plays of songs people are already interested in as “less valuable” than on-demand access to unfamiliar songs. They also note that competition from startups like Rdio, Slacker, and Deezer makes a free mobile option by Spotify even more relevant and timely.
A new study by Edison Research found that 53% of Americans listen to internet radio: 39% personal radio (i.e. Pandora), 27% streaming live radio (TuneIn) and 18% on demand music (Spotify).
According to the survey, 32% of listeners were listening to “a lot” more online radio than they did a year ago, and 83% of smartphone owners say they are listening online.
Spotify, Pandora and TuneIn recently joined forces to form what they’re calling The Streaming Audio Task Force.
As people spend less time on desktop computers, it’s more difficult for Spotify to intice them to buy mobile access. Techcrunch reports, “With no way to try out Spotify on mobile, the company had no way to upsell them to paid plans.”
As reported by Karp, major record labels like Sony, Universal, and Warner are eager to increase the company’s subscriber base and percentage of free users who convert to the paid version, but these deals could also supply the labels with significant ad revenue.
According to a Techcrunch source, the free-tier launch could confuse users at first because some songs may be unavailable. “They’ll blame Spotify” says Techcrunch, “but sadly, they should really be blaming the labels, as they’re the ones too stingy to realize a simple user experience creates the delight that keeps users coming back, and maybe even opening their wallets.”
The source said that Spotify will launch the free mobile tier on December 11th at a press event in New York.