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Spotify executives defend free tier, contend some people will never pay for music

on October 26, 2016, 10:30am

Of all the major players in the music streaming game, only Spotify maintains an ad-supported free tier. Apple Music, TIDAL, and even the newly launched Amazon Music Unlimited all require users to pay a monthly subscription fee to access their libraries of songs. Appearing at the Wall Street Journal’s WSJ.D Live conference on Tuesday, Spotify’s Global Head of Creator Services Troy Carter defended the company’s choice to offer free streaming (via Variety).

“We don’t ever get to a world where everybody is paying for music,” said Carter, the former manager of Lady Gaga, John Legend, Miguel, and others. He argued that if there are some people struggling to fill their cars with gas, it’s unreasonable to expect them to pay for a streaming subscription service. Carter said this is why pay-only services are untenable, and why he doesn’t expect Spotify’s free service to act as a gateway to paying customers. “They may never convert to a paying subscriber. They may not be able to afford it.”

(Read: Which Artists Are Still Holding Out On Streaming?)

Spotify’s Chief Strategy and Chief Content Officer Stefan Blom was also at the WSJ.D Live event, and he made the point that “free” doesn’t mean the music industry isn’t making money on the ad-supported tier. “We are monetizing it, and we are monetizing it well,” said Blom. “This ad-supported model works.”

Of course, some artists would disagree. In 2014, David Bryne wrote an op-ed praising Beats (the precursor to Apple Music) for opting not to offer a free service, which he said hurt artist’s pay. Others like Taylor Swift and Björk have pulled their music from Spotify as protest over low artist payouts, while Portishead’s Geoff Barrow revealed he earned just $2,500 off 34 million streams across all services. For their part, Spotify has disputed the payment figures artists like Swift often cite.

Carter and Blom also recapitulated Spotify’s anti-exclusives stance, noting that artists are also beginning to eschew the practice. “We don’t believe that it is good for the artist,” said Blom. “We are not partaking in that game.”

(Read: I’m a Pop Singer and Spotify Works for Me)

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