Friday, May 15, 2015

The risks of banning free streaming tiers

The music majors are negotiating with streaming music providers (Spotify) about curtailing free services. The free service could be capped:
  • Max 3 months, or 6 for existing users.
  • Possibly shorter or longer for selected artists.
Before banning free music altogether, one must bear in mind:
  • Free users do convert to paying users.
  • Free users do generate revenues: from advertising. This could possibly be extended.
  • Banning free will only lead to more piracy.
YouTube is the sector's biggest player. The above goes for YouTube as well: it tries to convert users to YouTube Music Key (or Google Play Music) and it has sophisticated ad models.