Universal Wants Spotify to Cut Free Music Streaming

By Gerald Lynch on at

After a few years of back-and-forth negotiations between labels, Spotify had seemed to have settled on a free, ad-supported streaming model that appeared to please all parties. Spotify could offer a largely-unlimited catalogue to free users in order to entice them to pay for the premium service, labels got a drip-feed of advertising revenues, and users could fill their boots provided they could put up with a few advertisements every so often.

But it seems not every label is pleased with the current situation. According to the Financial Times, Universal has had enough with the ad-funded model, looking to convince Spotify to reintroduce play limits to the free service. While the publisher won't confirm what the Financial Times' sources are claiming, CEO Lucian Grainge has been slagging off the free service recently in so much as he believes it's having a negative effect on the company's more-lucrative iTunes download sales interests.

If Universal's alleged concerns prove true, there's a slim chance that its substantial catalogue could be pulled from Spotify. Certainly, the two parties will appear at loggerheads for some time -- Spotify is adamant that a more generous free offering is vital in convincing users to upgrade to the premium tier Universal is trying to strong arm, and believes it's already a better-policed, more-fair alternative to the Wild West of YouTube. Universal on the other hand believes that, with so much freedom afforded the free version, there's little incentive for skin-flint music fans to cough up. [Financial Times]