Spotify: Free Users Will Be Limited To 10-Hour Monthly Cap

artist: Spotify date: 01/11/2012 category: industry news
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Spotify: Free Users Will Be Limited To 10-Hour Monthly Cap
Music streaming services are all the rage lately, with European crossover Spotify leading the pack. Now, The Verge reports that the beloved free program may soon cost you a few bucks a month. As detailed in Spotify's original terms of service, early U.S. sign-ups gave users six months of unlimited free streaming from its launch on July 14, 2011. As of this January, the Swedish company has ended the honeymoon phase and will soon implement a 10-hour monthly cap on all free accounts. According to Billboard (via Social Times), Spotify's earnings jumped from just under $18 million in 2009 to $99 million in 2010. Despite the tremendous increase, Spotify still lost $41.5 million due to the extreme costs of licensing thousands of songs. This has put the streaming service in a bind. If Spotify can't drastically increase its number of paid subscribers, the industry's biggest record labels will continue to charge very large fees. Though Spotify's new business model may come as a surprise to many torrent-crazed music fans, this is old news for subscribers in Europe, who experienced the monthly cap for free accounts since last year. Besides the 10-hour limit, free accounts can stream a single song a maximum of five times per month, so you might want to hold off on playing the Pointer Sisters' "I'm So Excited" too often. As Spinner previously reported, blues rockers The Black Keys have opted out of being featured on Spotify. Drummer Patrick Carney told VH1, "For a band that makes a living selling music, it's not at a point where it's feasible for us." Currently, it takes 64 streams of a single song for a band to make 99 cents from Spotify. Users that need more than 10 hours will now have to pay up $4.99 a month for unlimited access and $9.99 per month for higher-quality music and mobile access. Hopefully, Spotify won't make the same mistakes as Netflix did in 2011. Thanks for the report to Spinner.com.
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