If you’re an avid Spoitfy user, you’ve likely wondered why the service costs $10/mo on your tablet or smartphone, when you can get it for free on your computer. Well, you may soon be freed up to wonder about something else. The streaming giant has approached major music labels in hopes of driving down royalty fees so that it can offer its mobile app at the five finger-discount.
The company is currently involved in talks with Warner Music, and talks with Sony and Universal are soon to follow. Lest you mistake this for a fit of corporate altruism, however, know that the move will likely mean greater profits for Spotify which – despite being an industry leader – is essentially treading water financially. The hope is that this will allow it to expand its audience and reduce its operating costs.
Spotify currently boasts 5 million paid subscribers, and though it may seem like ceding $50 million per month is bad business, the overhead is such that the company is more focused on a different figure: 20 million. That’s the number of total users Spotify can claim, and it wants to see that number tick upwards.
In pursuit of that end, it’s trying to offer its service at the price that seems en vogue at the moment: Free.
What do you think? Would you rather listen to a free mobile Spotify with ads, or pay a few bucks a month?