Spotify may block new releases for free users

The Swedes are also reported to be considering reducing their payout per play on its service...

Spotify may block new releases for free users

Edward Smith / EMPICS Entertainment

Spotify is considering reforms which will restrict access to new releases for free users, as it negotiates new rights deals with the world's biggest record labels.

The company is embroiled in a tough series of licensing negotiations at a time when its rivals are attacking the early front-runner in the music streaming industry on a number of fronts.

The Financial Times reports that high-profile new releases may be subject to a "windowing" period, during which only paying Premium users will have access to these albums.

Citing individuals "familiar with the discussions," it adds that Spotify hopes to cut the percentage of royalties that it pays to music right holders.

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These payments have already been a source of controversy as artists and labels have complained about the amount of money which Spotify plays generate. Each stream is reported to be worth $0.006.

Spotify currently pays 70% of its streaming revenue to labels - this is already below the 73% Apple Music is handing over.

Music executives have argued that there is not enough of a difference between Spotify's free and paid-for services. 'Windowing' is a favoured option for labels, doing so "could be perceived as a concession, but in a sense, [Spotify] really doesn’t have a choice”, an unnamed label executive told the FT.

The same individual said that it is in the industry's interest for Spotify to succeed to avoid Apple Music being the "only player in town."

Apple has deep pockets and has been linked to a takeover bid for Tidal. The artist owned streaming service has been slow to build a significant audience, but has maintained control of exclusive streaming rights to some of 2016's key releases, including new music from Beyonce and Kanye West. 

Spotify still has a healthy lead over its rivals. It is currently valued at  $8.5bn and believed to be considering going public.