Spotify Will Always Be Free, Founder Hopes
Since it became available to all of the U.S. last September, streaming music service Spotify has become a hit — in part because it costs nothing.
The company, which has ten million customers globally (it won't say how many in the U.S.), initially offered it free for six months, after which users would have to pay if they wanted more than 10 hours of streaming a month. Then, last month, Spotify extended the free, unlimited listening indefinitely.
Can it stay free? "That's definitely what I hope," company co-founder Daniel Ek, told TechNewsDaily this morning (April 18). "And so far, it is working really well for us."
Spotify still isn't making a profit, Ek has said recently, but it is banking on new kinds of ads that even users might like. "For us, ads are not something you put in the corner of a Web page," Ek said. Instead, some ads will take the form of apps inside Spotify that listeners may actually want to use. For example, Intel has created one called Sifter that takes what you are listening to and creates a playlist based not on some algorithm (as with Pandora) but on what your friends like.
The Swedish entrepreneur officially announced the advertising apps today, though the word was already out. They will be available in the coming weeks and months, Ek said.
That doesn't mean Spotify won't provide alternate options for a fee. (Three million users are already paying.) Five dollars per month eliminates advertising, for example, and $10 monthly also adds the ability to play music on mobile devices, among other features.
But even the basic service provides computer users with unlimited listening to nearly any music you pick (sorry, Beatles and Pink Floyd fans). And so far that's free, which Ek notes is not a revolutionary idea. "Music has always been free in some way, shape or form. It was always free on radio – and then you had a paid version in the record store," he said.
But if Spotify can keep its basic version free, you don't just listen to the radio. You get to be the DJ.