Similar to Pandora, Slacker and other streaming music services, Spotify recently announced it would be dropping the $10 monthly charge for its subscription-based mobile radio service. The catch is that Spotify, like its competitors, will feature audio advertisements, according to the Associated Press.
This strategy is being carried out in an attempt to encourage non-payers to subscribe to Spotify’s premium service, which takes away commercials, the news source said.
“We found those that use radio are really some of the most highly engaged users of Spotify,” Spotify product vice president Charlie Hellman said, according to the Associated Press. “They stay longer and are more likely to upgrade.”
Despite only entering the market last July, Spotify already has approximately 3 million global subscribers and offers a monthly subscription service for computer streaming applications, the Associated Press said.
The rapid growth of Spotify – which just announced it will be integrated into Yahoo!’s Media Network – signifies a change in the consumer music landscape. Rather than paying per song, individuals often prefer to pay a flat rate per month and have access to an unlimited amount of music.
By leveraging a subscription billing and management platform to support their online offerings, music providers can more easily cater to these evolving demands, increasing customer experience while boosting their ability to generate recurring revenue.