If you want to listen to music from a band without buying their album, you probably do one of two things – look the band/song/album up on YouTube or go to Spotify to check it out without paying anything. And while that’s not going to change just yet, an article suggests that in a few years, you might not be able to listen to music for free any more. An article on Digital Music News suggests that the free ride might be coming to an end as a result of more people paying for subscriptions to streaming services. It points out that the “big three” major labels (Sony/BMG, Universal and Warner) may work together to get rid of free access on YouTube and Spotify once a certain amount of people are paying for subscriptions, which makes more money for the the streaming services, the labels and the artists.
At this point, ad-supported on demand (YouTube and the free version of Spotify) generates very little revenue, as seen in the above diagram. Within perhaps the next two or three years, as paid subscriptions to streaming services continue to rise, the money that free streaming generates won’t be as important to the labels’ survival. That number at which they’ll potentially eliminate streaming has yet to be agreed on, but Spotify has 50 million paid subscribers and with no free version, Apple Music had 27 million at the beginning of the summer. If that doubles in a few years, that may be enough revenue for the majors to pull the plu.
Of course, piracy will continue, even though it’s been on the wane for the last several years. And Spotify head Daniel Ek says that many that listen to Spotify for free switch to paying for it to cut out commercials and for the ability to listen on their mobile devices. Yet if the majors decide to play hardball, he may be forced to comply or risk losing a lot of music. The tipping point where labels may decide to eliminate the free tier isn’t certain, but Spotify reaching 100 million subscribers worldwide was one idea floated by Digital Music News, which could happen in 2018 or 2019. In short, stay tuned.
