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Here's how Spotify wants to upgrade free users' mobile experience

Here's how Spotify wants to upgrade free users' mobile experience


Spotify and the labels hope users of free service will plunk down for premium if they experience its benefits first hand

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Spotify for iOS
Spotify for iOS

Spotify executives are trying to convince their music label counterparts that the company's premium subscription service will sell itself if customers can get a taste for free. During negotiations in recent weeks to renew music licenses, Spotify's leaders have said they want to find new ways for consumers to sample the company's paid service for free, multiple industry sources told The Verge.

In recent weeks, much has been made of Spotify's success at growing the number of paying customers, which is now at six million. Most of Spotify's revenue comes from these paid subscriptions, but it's still unclear when the company might reach profitability. Years ago, the company was reportedly only converting 7 percent of free users to the paid plans. Now, music industry sources say Spotify is converting just under 20 percent of its 24 million total active users. Spotify's managers argue they can push that figure higher if more users are allowed to discover the benefits of the premium offer. The principal benefit is access to music on a mobile device.

Spotify may allow free users a limited number of mobile tracks

Currently, free Spotify users get access to music on desktop, but not on their handhelds, and must endure two to three minutes of ads each hour. Spotify offers a 30-day free trial period of the company's top subscription plan, which typically costs $9.99 per month. This service offers unlimited, ad-free music on a PC, laptop or mobile device.

The devil is in the details

Insiders say some of the ideas Spotify has floated include allowing users of the free service to choose a limited number of tracks to listen to on their mobile devices. Spotify has proposed that users can access these tracks for several months before having to replace them. There's likely to be some give and take in the negotiations. For example, a subscriber might be required to swap out the songs in the set after a certain number of plays.

Spotify has also suggested giving users the ability to choose the order the tracks are played, which would likely come with a few ads. Some at the labels would prefer that the song list for free users plays in a random order. Another idea presented was that Spotify could start serving tracks from its radio service once listeners had heard all their chosen songs.

Labels think mobile is the future, but don't want free to be a viable competitor to paid

One music industry insider said it's important to remember what the labels are after. They're looking for ways to funnel people from the free service to the paid, this source said. The labels don't want "free" to be a viable competitor.

Spotify sees its mobile experience as the key to convincing users its worth upgrading to the paid service. Despite the details, sources said the whole industry is betting that mobile represents the future.