New Delhi: With the advent of digital age, music labels have been facing the heat with streaming service like Spotify, Rdio, and Pandora offering free music impacting their revenue.
Universal Music Group is reportedly pressurising Spotify to cap its free music service with the hope of converting free users into paid subscribers. CEO Lucian Grainge had expressed concerns about the service's freemium model saying that such a model will not sustain the entire ecosystem of the creators as well as the investors.
A report on The Verge stated that other music labels are concluding that ad-supported free streaming services need to be adjusted. Labels like Sony Music and Warner Music too have expressed their doubts about the free streaming service.
In order to limit free streaming, these labels could seek to cap the amount of music users can listen to without paying up or limit all free streaming like through radio stations.
Spotify and Rdio both allow for unlimited free on-demand streaming on computers, but limit mobile streaming to shuffled, radio-like services. Paid subscribers get full mobile streaming, offline access, higher quality, and no ads at a price of $10 a month on Spotify.
Music labels have been supportive of free streaming feature in the past. However, as streaming grows and money continues to shift away from digital downloads and physical media, the labels are becoming less comfortable.
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