Startup

Spotify beefs up its free tier

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Today at the Gramercy Theater in NYC, Spotify’s Chief RD Officer Gustav Söderström announced a brand new free version of the Spotify mobile app.By leveraging their investment in machine learning, Spotify’s new free tier recommends music to users on the fly.

That said, the free tier has always limited users to shuffle.

With the new version, users can listen on-demand to whatever song they want, as many times as they want, as long as those songs appear on one of the 15 personalized discovery playlists like Daily Mix, Discover Weekly, Release Radar or Today’s Top Hits.In total, that’s around 750 tracks (>40 hours of music) that Spotify is serving up to users for on-demand listening.Spotify will also make recommendations in the free mobile version based on existing user-made playlists, from the songs on those playlists to the name of the playlist itself.

The company is calling this “assisted playlisting,” which essentially means that each time you search for a song to add to a playlist, Spotify will make recommendations similar to it as well.Finally, Spotify has built in a low-data mode (called data saver) that cuts data consumption by up to 75 percent.

In the past, Spotify didn’t allow offline listening for free, meaning that users were somewhat tethered to wifi if they needed to conserve data.With the new data consumption system, which caches music ahead of time to stream via 3G, users can actually listen to much more music with wireless data.

Alongside utilizing 3G, Spotify is also optimizing the streaming itself as well as the app (including imagery and other UI elements) to save data and power.All that said, advertisements will still run on the free tier of Spotify.

Which is part of the company’s strategy not only for funding a free tier but for converting users to premium.In 2014, Spotify introduced its free tier to mobile, letting users listen to their playlists on shuffle with ads.

It was a huge part of Spotify’s free-tier growth.

In fact, today Spotify has 90 million users on the free tier.

And many of those convert to paid users — the company now has 70 million paid subscribers.“If you’re on a date listening to music, you’re not going to want an ad to come on,” said Spotify’s Global Head of Creator Services Troy Carter.The company has focused heavily on mobile since 2014, especially where it concerns the premium mobile player.Spotify is built upon three tiers: ubiquity, personalization and freemium.

Söderström explained that Spotify thinks of itself as the broadcast radio of the 90s, where discovery of great music was supported by ads and drove people to the record stores.Spotify’s free tier represents broadcast radio for Spotify, and is a critical piece of Spotify’s overall strategy as paid services like Apple Music continue to grow.




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