In the past, the labels were very supportive of free streaming — they saw it as a way to bring new customers (and money) into a declining industry. But as streaming grows and money continues to shift away from digital downloads and physical media, it seems the labels are becoming less comfortable. Spotify says that a substantial free service is the only proven way to get new paid subscribers, and it argues that the data shows that streaming isn’t destroying proven revenue streams like iTunes. A spokesperson tells the Financial Times that “Spotify is monetizing people who have never been monetized before.” Despite those arguments, it may come down to backroom negotiation tactics to see if free streaming survives in its current state.
Maybe it’s not about whether or not free streaming survives in its current form. I don’t think that is the important question. Maybe it’s will the music industry ultimately survive in its current form?