A Bloomberg report details that Spotify is working on a new version of its free music streaming service. As per sources, the company is tweaking its existing free streaming service to make it easier to use for customers on mobile phones.
This will be Spotify’s first major product change since its IPO last week, and it makes sense because the company’s value will be calculated by its investors depending on its growth rate. Spotify has around 157 million users, out of which 71 million pay for its service. And yet, the paid customers generated about 90 percent of the company’s revenue in 2017. However, by getting more free subscribers onboard, Spotify can eventually tempt them to switch to its paid streaming service for an improved user experience.
In its latest forecast in March, Spotify aims to have over 200 million subscribers by the end of this year and around 96 million paid subscribers.
The company’s existing free music tier allows users to listen to almost all content from its music library but they cannot search and listen to it on-demand. Additionally, latest songs from high-profile artists are not available on it. There are also ads between music streams which help generate Spotify in generating revenue as well. Spotify’s free music streaming service has never been liked by music labels and artists so it remains to be seen how the company further improves on it despite criticism from them.
Spotify is holding an event on April 24 so it is possible that the company will unveil this revamped free tier at the event alongside its own speaker to take on Apple’s HomePod.