Spotify Pushing Labels To offer Free Mobile Streaming
There’s little doubt that Spotify is an awesome way to stream music — that is, unless you want to stream said music to your mobile device, which requires a monthly subscription. Could that soon change?
The Verge is reporting that music subscription service Spotify is in negotiations with Warner Music in an effort to expand their existing licensing agreements. In addition to “substantial price breaks,” the streaming service is also expected to push for the right to stream music free to mobile devices as well.
Although Spotify isn’t confirming or denying the report, several music industry sources claim the company will move from Warner Music to Sony and Universal in the coming weeks as the service tries to push closer to being profitable.
With five million paying subscribers and more than 20 million total users worldwide, Spotify is considered the king of the streaming music hill — but that doesn’t necessarily mean the company is making huge profits at the same time.
According to the report, roughly 70 percent of Spotify’s income goes to music licensing fees, with another 20 percent for marketing. That leaves only 10 percent left to cover the technology which runs the company, effectively leaving the service with little in the way of profit.
For end users, ad-supported free music streaming to mobile devices is likely to be a much bigger part of the current negotiations, particularly as more people abandon traditional desktop Macs and PCs for tablets and smartphones.
The good news is that no one on the music industry wants to see Spotify fail — but it remains to be seen just how much the big three labels are willing to budge on their behalf