Universal Music CEO Says Spotify’s ‘Freemium’ Will Undergo Changes

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Earlier this month, sources pointed Digital Music News to significant changes ahead in Spotify’s ad-supported, ‘freemium’ offering, specifically the introduction of a premium-only access tier for certain artists and releases.  Now, on-the-record comments from Universal Music Group chief executive Lucian Grainge lend support to that information.

In an interview with Hits Magazine, Grainge noted that ad-supported, free access would not be eliminated on Spotify, but that the current ‘freemium’ mix of ad-supported and paid subscription would be altered.


Hits Magazine: “What’s your sense of the streaming landscape right now?”

Lucian Grainge: “When you cut through all the noise, the potential is enormous, and obviously I remain incredibly optimistic.  A lot of the press coverage and industry chatter has been dominated by the ‘freemium’ debate, which has degraded the conversation to the point where you’re cast as either ‘for’ or ‘against’ ad-supported on-demand music consumption.  Clearly, it’s not that simplistic.

As I’ve said before, while ad-supported on-demand music definitely has a place, whether that’s as part of discovery or trials of new products and offerings, freemium alone is inadequate to support our critical ecosystem of artists, labels and the platforms themselves.

What that means is that we must seek the proper balance between ad-supported and paid subscription. It’s not one or the other.

With the two approaches in proper relationship, we can continue the level of investment we make in artists who then, in turn, can be fairly compensated for their work. If we get that right, everyone wins. That’s what we’re working towards.”


Spotify’s licenses with the major labels, including Universal Music Group, expire at the end of September, according to sources.  More as this develops.

Image of gate by NannyCam; image of Daniel Ek by Magnus Höij, both licensed under Creative Commons Attribution 2.0 (CC by 2.0).  


10 Responses

  1. Remi Swierczek

    Freemium or premium, with Apple or without, music industry is lost!
    Eddy Cue on Daniel Ek’s dope, the biggest hope of Lucian Grainge, is just permanently SHRINKING $200B of music goodwill to $20B of subs. YouTube style dope can add $5B of advertising cream.

    Dear Mr. Grainge, just relax start planning your next Grammy’s event and find human with access to Google.
    You will double Google and end up with$100B+ music industry.

  2. Faza (TCM)

    “Universal Music CEO Says Spotify’s ‘Freemium’ Will Undergo Changes”

    Um… no?

    I actually went and read the whole interview to see if there was important context there that didn’t get quoted, but it turns out to be exactly what it looks like at first glance: Mr Grainge musing in the non-committal manner of CEOs everywhere on the general nature of streaming, the surrounding debate, Life, Universe and Everything.

    Ah, silly me, it’s just another click-bait headline.

    • Paul Resnikoff

      You can also read all the relevant comments, in this article. Yeah, it’s word-smithed by some PR person, but distilling out the main point, ‘freemium’ as it stands will be changing as UMG is not happy with it. Additionally, the ‘proper balance’ between ad-supported and paid subscription is being re-considered and will alter — currently, ad-supported non-paying users can access everything, no exceptions. I don’t think it’s too difficult to read between the lines here.

      • Faza (TCM)

        Yep, we can read between lines and even tell one another what our little shoulder aliens are telling us.

        However, right now the facts on the ground are this:
        1. We know Universal (and Grainge) are not happy with ‘freemium’ as it stands and we’ve known this for a while now,
        2. We also know that Daniel Ek is not at all happy with the idea of locking even some of Spotify’s content behind a paywall and thus far Spotify have strongly resisted any attempts to negotiate even temporary premium-only offerings,
        3. We also know that Spotify’s licenses from UMG et al. are up for renewal.

        Given all of the above, we might expect that there’s some very strained negotiations going on between Spotify and the major labels at the moment. However, this does not change the fact that what you have here is a bit of forward-looking/wishful-thinking on the part of Grainge. It cannot even be construed as meaning that if Spotify does not accede to his demands (whatever they may be – his very general comments give us no idea), UMG will not renew its license (the nuclear option).

        Plus, of course, Daniel Ek could conceivably make good on his threat to shut Spotify down rather than restrict free – or simply say goodbye to UMG (as he’d done with Taylor Swift – unlikely though both options are).

        There is absolutely nothing in Grainge’s statements to even remotely justify any kind of strong statement about the future of Spotify. If you intend to speculate on what Grainge might really mean, at least be up-front about it, ‘s all I’m sayin’.

        • danwriter

          Faza is absolutely correct. This clickbait hed is very disappointing. Suggesting readers “read between the lines” is disingenous, at best. Paul, you really need to change the hed to read “Universal Music CEO BELIEVES Spotify’s ‘Freemium’ Will Undergo Changes.” Of course, then, since Grainge’s feelings on the matter are well known and there’s no new information here, there’d be no story at all.

  3. FarePlay

    “When you cut through all the noise, the potential is enormous, and obviously I remain incredibly optimistic. A lot of the press coverage and industry chatter has been dominated by the ‘freemium’ debate, which has degraded the conversation to the point where you’re cast as either ‘for’ or ‘against’ ad-supported on-demand music consumption. Clearly, it’s not that simplistic.”

    It’s very simple Lucian. Pay attention, be forward looking and stop giving away the store. When Spotify got the green light to offer ALL YOUR CONTENT for free the record companies basically failed in their obligation and responsibility to their artists. You don’t own them, you represent them. In a world with respect and integrity you make money together.

    You didn’t even do your due diligence on these guys from Spotify. If you had you would have realized they knew nothing about music, radio or anything connected to YOUR business.

    It’s very simple. You fucked up.

  4. Vulpixe

    Sigh… The Music industry is lost.

    Just when we had something good, they go and stuff everything up again…

    People don’t want hassle, or like paying for things… Removing Spotify’s “free” listening will resort to people pirating Music.

    • FarePlay

      “People don’t want hassle, or like paying for things… Removing Spotify’s “free” listening will resort to people pirating Music.”

      What’s the difference, really, between getting a check for $14 and having your music pirated? What’s up with that attitude? Have you no understanding of the value in contributing to someone else for something you want and they spent time making? Or are you just pissed off at a world your helping to create and doesn’t care at all about you and your life.

      This isn’t some moral, religious rant, getting people to pay for stuff, but ‘rather what goes around comes around.’ You do somebody right and maybe, just maybe, somebody will do the same for you.

      I don’t know what you do for living, but I’m sure at the end of the day or at the end of the month getting paid for what you do is very important. It is about survival, it’s not just your option to pay. Somebody is counting on you to pay them for their work.

      Maybe none of this means anything to you, because my own experience in having a purely online experience with music is completely different than owning physical copies of recordings.

      It is like having a relationship with someone you’ve never met through txting. They live in the next town, but it’s just not worth the effort spending an hour of your time and ten bucks in gas to meet them in person. Who really cares?

      I have a relationship with the music that moves and inspires me and that relationship is important to me. So, of course I’m willing to pay for it.

      Because I want more of the great stuff and they ain’t gonna making it if they have to work at something else so they can pay their bills.

  5. FarePlay

    Right on Dean Davis.

    2nd for all those who talk about Free. Until piracy, the music business was successful because bands toured to sell recorded music. Do you know what that meant? Tickets to shows were far less expensive.

    So here’s what you’ve accomplished. All the extra money you spend on going to see live music would have paid artists enough so they didn’t have to crush fans for making money at shows.

    So in essence you screwed yourself. You could have bought the music, supported the artists, see more bands live and had extra money in your pockets.