Spotify Screws Paying Customers While Giving A Leg Up To Freeloaders
Why bother about paying for Spotify when all their big improvements are aimed at freeloaders.
THE Swedish streaming Companies big New York event was more about freebies and software improvements than a tipped voice enabled speaker to take on Apple, Google and Amazon.
Premium Spotify customers were left like a shag on a rock paying for a service while all the improvements went to freeloaders, there was also mention of new high res audio services, and this is from a Company that is yet to make a profit.
What the much heralded event boiled down to was an improved mobile app and updates to their free download service, this has not happened since the last updates in 2016 with premium customers totally ignored in favour of improvement in free content services.
The upgrades to the free service is designed to deliver a better experience it includes unlimited free listening to 750 tracks from 15 top playlists, which is over 40 hours of listening.
Users can select exact tracks to listen to within these playlists, rather than being forced to rely on shuffle, and can skip as many times as they want.
The company said that they will use the technology to automatically generate playlists for its users in an attempt to take on the traditional radio broadcasting industry.
Spotify sees its free tier as being key to attracting new, young users who can’t afford a monthly subscription.
Their exposure to new music, the company hopes will broaden their musical horizons while also encouraging them to pay for the premium service.
Users will get unlimited access to 750 tracks from 15 top playlists (including Discover Weekly). This is way sort of the subscription version of Spotify who recently floated in the USA.
One big plus is that users of the free service will get unlimited ‘skips’ and will be able to pick songs directly.
Another announcement was the introduction of a ‘self-driving playlists’ that will utilise machine learning to generate playlists.
Aimed at taking on traditional radio stations such as Smooth FM or KISS.
Spotify currently has 90 million free tier users who they are trying to convert to paid.
The Swedish Company said that the new app will consume up to 75% less mobile data if they turn on the ‘Data Saver’ mode.
Playlist generation starts when you first open up the new app. It will ask you to list your favourite artists, so it knows what music you’re into. After that point, the app’s home screen will be populated with Daily Mixes and curated playlists based on your preferences.
However, if you’d like to curate your own playlist then Spotify will help you do so by suggesting similar songs you might want to add.
The new app will be rolled out globally in the coming weeks.
So far, the company has announced no changes to its Premium service which is a bit rough as these subscribers are generating the revenue that allows the freeloaders to get access.
The market also had a negative attitude to the Swedish Companies latest offering with shares falling nearly 2% straight after the announcement.
Previously, Spotify’s free tier mainly allowed users to listen on shuffle mode to playlists they created on their desktop computers.
The new mode is the result of new licensing deals, according to Spotify’s research-and-development chief Gustav Söderström. “Spotify is not really in the business of giving access to music,” he told media at the press conference.
“We’re in the business of discovery. We think most of the others are still in the business of just giving access.”
What he hid fail to reveal with his “discovery: stategy was how Spotify intended to make a profit.
90% of the Companies revenues are produced from monthly subscriptions. In 2017, Spotify made $4.5 billion in revenue from the $9.99 monthly subscription, compared to $511 million for the ad-supported service
And Spotify has been bleeding money badly for years.
The company said revenues amounted to $5 billion in 2017, up from $3.6 billion in 2016. Losses, however, topped $1.5 billion for 2017, from $662 million the prior year.
Söderström said that Spotify’s goal with its new service wasn’t to create “pain” for free users so they’d start paying up.
I am a Spotify Premium paying customer.