Spotify’s user base is growing Faster than ever, but paid subscriber growth is not keeping pace with free listeners. This may be why she’s exploring pushing song lyrics behind a paywall.
Over the past few days, the music streaming company has been causing a stir by locking out song lyrics for some of its non-paying users. For those listeners on the free tier, Spotify displays a message that reads: “Enjoy the lyrics on Spotify Premium“.
CJ Stanley, Spotify’s executive director of public relations, said the change is “just a test.” edge. The company is “currently testing this with a limited number of users in a pair of markets,” Stanley added in an email to TechCrunch. Spotify declined to share more information about why the test was conducted.
But this is not a secret. Spotify has certainly competed for the ad-free category, claiming (amid a spat with Taylor Swift) that The freemium model is the future of the music industry. However, Spotify hasn’t given the free tier much love in recent years. According to Adna, her The last major overhaul was in 2018.
With l Latest earnings reportSpotify told investors that monthly users of its ad-supported tier rose 34% over the past year to 343 million. The company’s monthly listenership also grew during that period, but to a lesser extent – up 17% to 220 million.
This is still growing, but Spotify is not profitable, and its main competitor (Apple) is the most valuable company in the world. Spotify remains more popular than Apple Music, but the company clearly needs to convince more of its free users to pay. Even with Spotify’s investment in Advertising related products And Adds some freebiesThe evidence is in its import. Spotify reported more than €2.7 billion in premium (aka paid subscriber) revenue in Q2 2023, and just €404 million in ad-supported revenue during the same period.
Will this songless audition continue? Stanley declined to share more details about whether the change will become permanent. The company seems to be doing a temperature check by limiting the scope of the test, and in any case, it’s still very easy to find free song lyrics online.
Spotify’s stock price is nowhere near its all-time highs, when the stock is trading at $300 a share in early 2021 (to be fair, the same can be said for a lot of other tech companies, too). However, the company has seen its stock prices rise again this year. The stock closed the day near $160 per share — up more than 94% since the start of 2023.