Jonathan Foster, the general manager of Spotify in Europe, has explained in an interview with the website New Media Age, what the decrease in the amount of free music from 20 hours to 10 hours a month will mean to advertisers.
Foster said, “For brands it’ll be more valuable to reach a lot of people with one ad than serving one person the same ad over and over again."
Spotify sent us a statement saying, "Our chief priority is to keep the free service, which is what has made Spotify so popular. We’re a company whose primary ambition is to offer all the world’s music to everyone, while also scaling and growing the business and our user base to many times its current size. We’ve continued to show that the service is doing extremely well both in terms of popularity and the significant revenues we pay back to the music industry, but as things stand we need to tweak the service to ensure everyone has access to legal music."
That's particularly pertinent as Spotify has to pay for each track being played, which means that reducing the amount of free monthly hours and limiting the number of times a track can be played may help make Spotify financially more sustainable.
Spotify added that the 10 hours monthly limit is equivalent to 200 tracks or 20 albums. The decision may prompt more users to start pirating again or perhaps some will jump ship to other services like Grooveshark or 7digital.
Spotify offers a premium service for £9.99 a month and an unlimited one for £4.99 that doesn't allow users to listen to music on their mobiles or offer an offline mode for playlists.