How many of you have Spotify? Now how many of you pay for Spotify Premium, and how many of you just stream on the free service? To the former group, you're already at where the music industry wants you to go. To the latter, you might have to cough up some cash in the coming years.
According to several sources interviewed by Digital Music News, free music streaming across both Spotify and YouTube may eventually disappear. The article says the effort would come from Sony/BMG, Universal, and Warner, or as they're cited – the big three. Though it isn't just a random timeframe for this either. The sources say there's an agreed-upon threshold of subscribers that, when hit, would be enough to keep the industry going. At that point, free streaming would just vanish in favor of gaining more paid subscribers.
The terminations would occur after an agreed-upon threshold of paying streaming subscribers is reached. In just 2-3 years, that threshold could materialize.
In order to enforce the transition mandate, the labels will threaten pullback on critical music licenses. That is proving a highly-effective tactic, and one used successfully against Spotify several months ago to implement ‘windowing’ for high-profile releases.
Accordingly, terminating free isn’t a new thought — just as windowing was simmering for years. In fact, a second source said ‘shutting it down’ has been actively under discussion for years. But tricky politics between artists, YouTube, Spotify, and internal debate made that impossible.
On top of all of that, a faction within the industry has strongly felt that free streaming has marginalized piracy, and that this 'starvation process' should continue.
The sources go on to say that piracy numbers are down, with one in particular saying "[piracy] is always going to be there."
So when can you expect this transition, if it ultimately happens? Digital Music News seems to think it could occur within two or three years, though in 2016 Sony Entertainment CEO Michael Lynton said to Re/Code "I think [free access] stops probably when you get over a — I don’t want to say the number, but… many, many-fold bigger than what we have in the current paying subscription world."
The only argument I could think of against this is that Spotify and YouTube don't pay artists as well at all. So if you've got a growing number of independent artists who don't get onto the platform due to poor payment, could it affect the subscriber numbers? It may or may not, but you can buy YouTube views and subscribers to keep enhancing your YouTube growth. Likely that wouldn't be the case, but it's still something worth mentioning.