Trying to make money out of music

Ever since young tech savy music lovers got their first taste of fast reliable internet connections the game changed for the record companies and basically anyone hoping to make money out of music. 

Spotify

Spotify was one way of changing that, giving users the chance to listen to as much as they liked, as often as they liked, so long as they paid the monthly subscription fee.

So far so good, except to get us interested there is a free option too which you could listen to as often and as much as the paid for one. The only limitations were that you couldn't have it on your phone and every so often an advertisment would interrupt the music. 

Well it seems this might have been a bit too generous. The company announced on their blog today that free users who joined before November 1st 2010 will, from May 1st, have their free listening cut from 20 hours of music a month to 10 hours, with a limit of five plays per track. The changes will also apply to accounts of those who signed up after November 1st 2010 six months from when they joined. 

On the face of it, it's a pretty drastic cut for users of the free service. Reaction has been pretty tough with many users commenting on the annoucement blog post that they would be leaving Spotify. 

In my opinion, this is pretty over the top. I'm a big fan of Spotify and I really think it offers a promising model for music delivery. Their mobile client is especially slick and well designed. They clearly need more users to make the switch to premium, the latest figures I could find suggest a converstion rate of 3.57 percent. The question for the team is will this change encourage people to pay up or put them off altogether?