Spotify Expands Free Tier With On-Demand Playlists and Data Saver Mode

Tuesday April 24, 2018 7:44 AM PDT by Mitchel Broussard
Spotify held an event in New York City today, unveiling a new version of its free music streaming tier that introduces a few new features for those users not paying for Spotify's $9.99/month main subscription plan.

The new free tier allows users to pick and choose which music they want to listen to on-demand, but only if the tracks appear within one of the 15 curated discovery playlists. These include Daily Mix, Discover Weekly, Release Radar, and more. Previously, free tier users were limited to shuffling songs at random.



According to TechCrunch, "that's around 750 tracks (>40 hours of music) that Spotify is serving up to users for on-demand listening." Additionally, users on the free service will get recommendations based on their own playlists, with machine learning taking into account songs in the playlists and even the name of the playlists. Spotify calls this "assisted playlisting."

CNET reporter Joan E. Solsman also mentioned that free users will have access to podcasts and vertical videos. Curated playlists, like RapCaviar, will also "stay the same across both tiers" of free and premium users.

There is also a new low-data mode that aims to cut data consumption "by up to 75 percent." In total, Spotify head of product development, Babar Zafar, said Spotify's free tier is "becoming much more like Spotify premium" with this update. As a note, the free tier will still have advertisements between songs.
In the past, Spotify didn’t allow offline listening for free, meaning that users were somewhat tethered to wifi if they needed to conserve data.

With the new data consumption system, which caches music ahead of time to stream via 3G, users can actually listen to much more music with wireless data. Alongside utilizing 3G, Spotify is also optimizing the streaming itself as well as the app (including imagery and other UI elements) to save data and power.
As Spotify expands its free service, Apple Music still only offers new subscribers a chance to try things out for three months at no cost. Afterwards, users must pay for a subscription or cancel their plan.

When asked whether the company is worried about losing paying subscribers to the newly expanded free tier, chief product officer Gustav Söderström said that it wasn't in Spotify's plans to make a free experience feel worse in order to get them to become paid subscribers. Still, over time the streaming service hopes a more robust free tier turns users into paid subscribers. "The more you play, the more you pay," Söderström said.

Tag: Spotify
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archer75
25 weeks ago

I guess I'm not sure how they keep a free tier going. Don't artists want to get paid for their music? And what argument are they giving the record companies. I would think they'd be putting the kabash on anything free.

They are getting paid. Free tier has ads which pays for it. Or most of it.
Rating: 7 Votes
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Michael Scrip
25 weeks ago

They are getting paid. Free tier has ads which pays for it. Or most of it.


Ads don't pay for all of the free tier. Not even close. Ads don't pay for most of the free tier either.

Spotify's ad revenue is tiny compared to their premium subscriptions... so it's actually the paying customers who are subsidizing the free customers.

At least that's how I understood it when this topic has come up in the past. Someone can correct me if I'm wrong.

EDIT: I just found some numbers. Spotify's ad revenue us just 10% of their total revenue.

Basically... 10% of their revenue comes from ads... yet their free users represent 45% of their userbase.

So yes... it appears that Spotify's paying customers are funding their free customers.

Back to the topic. Artists get paid on both tiers. Almost all of the money Spotify pays goes to the artists, labels, publishers, etc.

Spotify pays so much... that there's no money left for themselves. That's why they have always posted a loss every year since their inception.
Rating: 5 Votes
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itsmilo
25 weeks ago
These playlists right there are one of many reasons I stick to Spotify. Their playlists selection are yet to be beat
Rating: 5 Votes
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OldSchoolMacGuy
25 weeks ago
"Optimizing the streaming" means using lower quality audio.

Now that Spotify is a public company, giving away the free option isn't likely to be able to continue forever. It will have to become more and more constrained in order to push people to the paid tier. They have a responsibility to turn a return for shareholders and losing money through the free offering isn't going to be acceptable.
Rating: 3 Votes
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zooby
25 weeks ago
[LIST=1]
* Apple Music is gonna overtake Spotify.
* People will get triggered.
* “I’m surprised”
* “Muh recommendations”
* “DAE iTunes bad”
Rating: 2 Votes
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ArtOfWarfare
25 weeks ago

"Optimizing the streaming" means using lower quality audio.

Now that Spotify is a public company, giving away the free option isn't likely to be able to continue forever. It will have to become more and more constrained in order to push people to the paid tier. They have a responsibility to turn a return for shareholders and losing money through the free offering isn't going to be acceptable.


My understanding says neither of your statements is correct.

They say they're downloading content while you're on wifi before you actually listen to it. That's how it's optimized - they're just guessing which tracks you're most likely to pick to listen to, and downloading them when you're on wifi, before they're actually requested. Since you're limited to a set of their playlists and radios that only amount to ~40 hours of content if you're on the free tier, having a 75% reduction in downloads really just means they download 30 hours of content per month while you're on wifi.

Also, they've had the free tier for forever. They just expanded it a bit. Not enough for me to revert from paid to free, but probably enough to bring in several people who had been resisting so far. You'll try it on and off for a few months before they hook you and you become a paid user who's too lazy to cancel your subscription later on.

Free tier now includes full access to Discover Weekly, which is Spotify's Ace that Apple seems oblivious to.
Rating: 2 Votes
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jcphoenix
25 weeks ago
It still pisses me off that Spotify updated their iPad app a while back to make it worse (consistent with the iPhone version instead of the iPad-friendly layout they had before).

And they still don't allow for Slide Over, let alone Split View. I can't even use Spotify just swiping in while I'm doing other things on the iPad Pro. I literally have to go to the app every time in fullscreen to change or do anything. It's archaic and pisses me off that their "premium" experience is so ******. What are the chances that this update fixes any of this? I'm not holding my breath.

The only reason I haven't moved back to Apple Music is because Apple Music has even bigger issues for me. When it first came around and I started with the trial, it actually wiped a huge portion of my downloaded music library. I had to go back to a previous back-up in iTunes and manually add anything I had brought in since. On top of that, it would often not sync a bunch of songs to the iPhone or iPad...I'd open an artist only to find out the majority of tracks were randomly missing from my device.

I gave up on it after a few months, then tried again a year later, and it did the exact same thing, wiping tracks sometimes, not always syncing everything fully, etc. It's too bad cause I'd love to just give up Spotify at this point but I don't want to risk the issues with Apple Music anymore.
Rating: 1 Votes
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AhRiHmAn
25 weeks ago

These playlists right there are one of many reasons I stick to Spotify. Their playlists selection are yet to be beat

Il just left AM after 2 years in part for that reason , the discovery in Apple music is so bad.
What Spotify gives me to listen after 3 weeks is already better than what Apple did after 2 years.
About the Mac app compared to iTunes....wow. I won't miss iTunes anytime soon
Rating: 1 Votes
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archer75
25 weeks ago

Lol Spotify has not in its history made $1 in revenue.

Technically incorrect. They make billions in revenue every year. But I know what you're saying. They haven't made profit. Amazon didn't turn a profit for many years.
Rating: 1 Votes
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one more
25 weeks ago

I guess I'm not sure how they keep a free tier going. Don't artists want to get paid for their music? And what argument are they giving the record companies. I would think they'd be putting the kabash on anything free.


It’s like with Facebook, the new free tier still has ads between songs, the paid plan does not.
Rating: 1 Votes
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