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The free version of Spotify is a great place to find new music for no cost, as long as you don't mind the occasional advert thrown into the mix. But the record labels aren't so keen on this on-demand, ad-supported model, because it doesn't make them enough money.

The Financial Times says Universal Music Group, the largest and most influential of the labels, is using contract renegotiations with Spotify to get it to cut down the amount of music it offers for free.

The free tier would remain - but with greater restrictions.

"The market data really speaks for itself," says a Universal source quoted by the FT. "It's clear that the key to success for artists, consumers and Spotify alike is developing an offering that drives more free users to the paid tier."

Pay up, freeloaders

Non-paying users on the platform currently have to put up with the occasional advert and can only listen to shuffled 'radio style' music on mobile devices, but otherwise they can access the full Spotify library.

Spotify's team met us with a flat "no comment" when we asked for a response but they did direct our attention to this blog post by CEO Daniel Ek written last November: Spotify's argument is that no free tier means no users signing up, no one upgrading to premium, and no money for artists.

After all, there are plenty of piracy sites offering illegal downloads for no charge, while YouTube is another avenue for music lovers who don't want to pay - it offers free, unlimited access to a huge library of songs, which is probably the reason that YouTube Music Key now exists.

It's not quite as straightforward as Spotify vs the record labels, though: Universal and the other big players own stakes in the music streaming service, and industry executives would much rather see free or premium users on Spotify than illegally downloading their tunes.

Getting the balance right between free and premium continues to be a tricky challenge.


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