Spotify wants to boost the amount of free music it offers to smartphone users in the UK, in a move likely to fuel a sharp rise in on-the-go streaming. At the moment, only Spotify subscribers who pay £9.99 a month can play tracks on mobiles and tablet computers after a free 30-day trial.
The digital music service is expected to enter negotiations with major music companies this month as it hammers out new licensing agreements. Spotfiy's move to expand its free offering would give it an edge on its streaming rivals, Napster, Rdio and Deezer, all of which charge a monthly £9.99 fee to play music on the go. Last year, Spotify launched a free radio player for Apple iPhone and iPad owners in the US offering unlimited songs and stations alongside advertising. Complex licensing arrangements mean that Spotify has been unable to launch this service in the UK – but a renewed push in the current negotiations with rights holders could see a similar product offered to music fans in Britain.
According to US technology site, The Verge, Spotify has already started negotiations in the UK with Warner Music – home to Bruno Mars and Fleetwood Mac – and will begin talks with the other two music majors, Sony and Universal, in the coming weeks. Industry experts believe London-based Spotify is in pole position among streaming rivals to expand its free offering. The company has managed to convert about a fifth of its 20 million active users into paying subscribers and has paid out over $500m (£327m) to rights holders since its launch in 2006. The loss-making company pays 70% of its revenue to rights holders, which totalled €187.8m (£164m) in 2011 according to the latest available accounts.
Spotify faces competition in the UK from US-based Rdio, which launched in Britain last year with a similar pricing model. Deezer is another competitively priced rival, but has the advantage of being bundled into Everything Everywhere's UK 4G service from its launch in October 2012.
Research published by the BPI, the UK music industry trade body, earlier this month showed the increasing importance of streaming services to customers and record labels. Products such as Spotify and Rdio contribute nearly £50m annually to music labels, accounting for 15.2% of their digital income, according to the research. Last year saw the launch of the first Official Streaming Chart in the UK, eight years after the introduction of the legal download chart.