Universal Reportedly Wants Spotify To Scale Back Its Free Streaming

An anonymous reader writes with news that Universal CEO Lucian Grainge is not a big fan of free streaming music. "Spotify might have bent over backwards to lift restrictions on its free streaming service a couple of years ago, but at least one music label appears eager to turn back the clock. Financial Times sources understand that Universal is using licensing negotiations to squeeze Spotify and demand more limits for those who don't pay up, such as restricting the amount of time they can play tunes in a given month. The publisher isn't confirming anything, but CEO Lucian Grainge has lately been chastising the free, ad-based streaming model — it's no secret that he would like more paying customers. According to one insider, Universal believes that Spotify is directly hurting sales at stores like iTunes."

Comments

Or, from another perspective ...

[gstoddart]

According to one insider, Universal believes that Spotify is directly hurting sales at stores like iTunes.

Or, you know, maybe the insiders are morons who believe in their unrealistic assumptions about just how much they're going to sell.

Because, you know, according to the copyright idiots, more value than the GDP of the US or any other country is lost to piracy.

Maybe the pay-for-play digital music market is exceedingly finite, and your wishful thinking of getting billions of dollars for doing nothing is complete crap?

Re:Or, from another perspective ...

[93 Escort Wagon]

I find it funny to recall that, only a few years ago, it was iTunes that was the enemy according to the big labels - and they did everything they could to undermine Apple's influence.

They figured out how to monetize that... and I'm sure they'll figure out how to turn Spotify into a profit generator as well.

Re:Or, from another perspective ...

[msauve]

...and years before that, big labels got in trouble for paying people to stream their songs for free!

Re: Or, from another perspective ...

[AvitarX]

Of course it's hurting sales.

Radio stations based on a song are often superior to my collection. At work it's all we use now, yeah yeah, anecdote.

Radio stations that play what we want are better than Dj ing from our own collection, and way better than the radio.

I was converted to a paying customer to get specific songs when I wanted too though. I think that what they really should attack though is custom playlists on the desktop (to maximize revenue, as a happy paying customer, I just hope they don't kill the concept of music subscription, I don't know how I'd discover new music without one).

Re:Or, from another perspective ...

[Half-pint HAL]

Or, you know, perhaps it is hurting sales because it's competing. Which is perfectly legitimate, free market and all that.

And by the same token, it's perfectly legitimate for Universal to threaten to remove their catalogue, free market and all that.

Spotify's competitivity derives in no small part from its low cost base. When the first reports of Spotify's royalty payments came out, I looked at my CD collection and tried to estimate how much in royalties I had paid to artists. I think I figured that in a lifetime of listening to Spotify, I would generate something like five to ten CDs worth of royalties, or something crazy like that.

Message to all braindead CEOs out there

[Anonymous Coward]

The middle class income keeps stagnating and prices keep going up. The first thing to go is entertainment.

Re:Message to all braindead CEOs out there

[Dutch Gun]

The middle class income keeps stagnating and prices keep going up. The first thing to go is entertainment.

Believe it or not, as someone in the entertainment industry (videogames) who has worked through a couple of recessions, my job has been far more recession-resistant than I would have anticipated. No, the first thing to go is expensive luxuries, or other big-ticket items. Even during a recession, most people are still working, and even if they don't have enough for more expensive purchases, they still apparently have enough to buy a videogame or two, go out to see a movie or to dinner, or pay for some music.

I'd blame the major media industry's resistance to new business models more than anything. Oh, and the fact that they target their customers with lawsuits and push shitty laws through Congress. It's no wonder they've engendered such hatred among their customers (not that EA and Activision haven't done the same, of course). I've never understood how companies that make entertainment products can manage to continuously piss off their customers with such regularity.

Universal wants me to use YouTube more

[Karmashock]

Because... universal has hosted every single song in its library on Youtube.... for free.

And I don't have to deal with some shitty streaming service deciding what it is going to play next. I can just play the exact songs I want.

And those ads on youtube? Well, adblock kills them. I try to keep adblock off if I want to support the person that posts the video... but if I either don't care or I actively want them to make no money... then adblock is happening.

Here is the thing, Universal... the CD is dead. The Record is dead.

What did you people do before records? You existed and your people made money.

I know they were on the radio... I know they were doing concerts. I know they were singing in advertising. I know they were getting cast in movies or used by movies to do singing bits.

That is what you're going back to.

Because the CD is dead.

Spotify etc are at best like the radio of old. And the radio didn't charge listeners to listen. You tune in and listen. Put an ad in there if that makes you happy. What money you get is going to come by taking a percentage of that revenue.

If that isn't a lot... don't know what to tell you. The ad companies are rating the VALUE of your listeners as that amount of money.

If reaching those people with an ad is worth 2 cents then your music is likely not worth a great deal more than that.

Get over it.

Find something else for your artists to do to make money besides make records. Records are dead.

I'm Torn.

[sg_oneill]

Whilst I support what Spotify do on principle (I havent pirated a single song since spotify came out, although I had already started buying my most loved stuff on iTunes) it does represent a pretty bad deal for artists. I've had a fair few thousand listens on spotify, not bad for a small band, but haven't seen more than a few measly cents off this.If this translated to, say, a hundred sales on iTunes, well it'd be somethng. There has to be a middle ground where artists can get paid (I'd love to write you guys music for a living), but lets music be free.

I ended up putting my stuff on torrents, beause screw it, if I'm not going to be paid, I might as well at least get some exposure out of it. But it'd be nice to sell a few albums.

Re:Well, he's not wrong there

[Opportunist]

Who gives a fuck about supporting some artist? This is about profit for Universal, the artist is the necessary evil to your money!

The New Reality

[Irate Engineer]

The old model for music distribution:

1. A song gets played on the radio.

2. A listener hears the song and would like to listen to it on demand, so they head down to the album store and buy a CD or record.

3. Listener pays for product, leaves happy! Music!

4. Distribution label PROFITS!!! (though cut has to go to artist, agent, CD/record production, etc.. ).

The new model for music distribution:

1. Listener hears artist's music on Youtube, can play on demand for free, can contribute to artist directly!

2. ??? - sound of crickets chirping -

Not seeing the need for big labels anymore myself. They are trying to coerce money out of a system that is rapidly realizing this new reality. Good luck with that!

Radio vs. jukebox

[tepples]

why isn't universal getting the same cut for paid or free streaming?

As I explained in a comment to a previous story, US copyright law provides for a compulsory license to stream sound recordings at a fixed royalty so long as a service resembles radio more than a jukebox. Pandora, for example, selects songs in a similar style to the artist whose name you key in and is therefore not considered an "interactive service" that substitutes for purchases.