Yahoo Finance TechCrunch Minute: Spotify’s move to paywall lyrics is putting pressure on free users
Spotify's slow movement to put lyrics behind its paid service wall in its music service are about as popular as you would expect. Precise details of the update are evolving but what we can say at this point is that it seems that Spotify has a new feature up its sleeve to try and get free users to convert to is paid service.
The why behind the move matters more than the what. Sure, it's a little weird that Spotify is going to start putting information that is freely available online behind a paid wall, but the company is in a slightly difficult position today. Thanks to an early start and attractive pricing, Spotify is huge. It does billions in revenue, and helped shake up the music industry for good.
That said, it largely offers paid access to other peoples' music. Other companies do the same. Apple is one of them. That means that Spotify's pricing power is modest at best. Features like its yearly music review are neat, but don't allow Spotify to charge more for its mostly music service than, say, Apple Music.
But as Spotify makes a lot more money off its paid accounts than it does off free users, it can at least try to get them to upgrade. And it only has so many dials to turn there. So, behind the paywall go the lyrics. For those of us who already pay, it's a non-issue. But for the budget-conscious, it may seem that their prior service is getting worse for no reason that they can suss out. So long as some convert to paying users, Spotify will endure the gripes. It needs the gross profit.
