This post has been updated.
She hasn’t quite got her way yet, but Taylor Swift’s crusade against against free music is getting a lot of traction.
The biggest music star on the planet famously yanked her entire catalog from Spotify last year because of its free, ad-supported tier. “It’s my opinion that music should not be free,” Swift wrote in a widely discussed and occasionally ridiculed Wall Street Journal op-ed.
Now, in what is surely music to her ears, it looks as though Apple’s imminent streaming service will not include a free option. Apple is expected to make a huge push into streaming music in the coming months when it relaunches Beats, which it bought for $3 billion last year, under the iTunes brand.
It would only need to convert a fraction of the 800 million credit card holders it has on file into subscribers to become, easily, the biggest player in streaming—and set the tone for the rest of the industry.
Apple’s expected decision to forgo a free tier reflects a serious rethink among record labels about whether the freemium model is financially viable. “Ad-funded on-demand is not going to sustain the entire ecosystem of the creators as well as the investors,” Lucian Grainge, the head of Universal Music Group, told Re/Code last month. A string of senior executives thought to be in favor of free, ad-supported streaming recently left the label.
This could be a big problem for Spotify when the time comes time to renew its licensing deals with labels. “Put it this way, Spotify’s free service will look very different a year from now,”one music industry source tells Quartz. According to Billboard, labels are pushing for listening caps to be imposed on free users.
Spotify CEO Daniel Ek has repeatedly said the company’s free service is a key stepping-stone for users who eventually become paying customers. Eighty percent of the company’s 15 million paid subscribers previously used the free, ad-supported option, the company says. So removing or altering the option could affect its user growth, and even complicate potential plans for an IPO.
Jonathan Prince, a spokesperson for Spotify, said: “The idea you would talk about cutting off a free service that has a clear proven path to subscriptions, when you have all these other free services out there like YouTube and Pandora and piracy, it just doesn’t make any sense to us”.
Other streaming services don’t have a free option (like Rhapsody) or if they do (like Rdio) it is much more limited than Spotify’s, so this problem is quite unique to the Swedish company.
That said, there is a streaming service that allows you to listen—and also watch—lots of music for free on demand. It’s much, much bigger than Spotify, and the music industry is not trying to get it taken down. It’s called YouTube.
Even Taylor Swift’s music is still all over it:
The difference is 1 billion people use YouTube each month. By contrast, Spotify had 60 million total users at last count. YouTube is also nowhere near as convenient as Spotify, although it has a paid service of its own in the works.
In any case, the Google-owned site is too big to be affected by the war on free music, in the short term at least. Whether the same applies to Spotify is the big question.
9:52am ET: Updated with a comment from Spotify.