Spotify to Take on Pandora with Free Music

Music-streaming service Spotify will reportedly announce that a mobile version of its service with unlimited music will become free for users, news that will likely be announced at a press event the company is holding Dec. 11 in New York City. Currently, only members who have Unlimited membership to Spotify (at $5 per month) or Premium membership ($10 per month) can use the mobile app without a limit. Those who are using Spotify for free are limited to 10 hours per month. This new version of the mobile app will have ads, not unlike the Spotify Web app, Pandora or iTunes Radio.

The Wall Street Journal reports that Spotify has been negotiating for nearly a year with the three major record labels — Sony Music Entertainment, Universal Music Group and Warner Music Group — on the rate Spotify will pay the labels to stream their music on the free mobile app.

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According to sources, the ad-supported app will have a limited selection of songs and will likely run in channels, similar to streaming-radio service Pandora, rather than the completely open structure of the Web app. Spotify's catalog includes 20 million songs.

The streaming music service has been criticized by artists for what they say is a low rate and has recently launched a site called Spotify Artists. The site allows musicians to see how popular their music is on the streaming service and how much they are earning via royalties.

Spotify currently has 6 million premium subscribers and 20 million active users all together.

Source: WSJ

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