Freemium…Killing or invigorating the music industry?

Ad-supported free music has created huge revenue in recent years, but many think this service is hindering the music industry.
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The recent meteoric rise of ‘streaming’ has given birth to a new and more modern way of enjoying our music. Having recently eclipsed CD sales in terms of revenue and with it’s eyes now firmly set on overtaking digital downloads, streaming is definitely here to stay. However, despite all the success and revenue it has generated, many artists and music industry figures have spoken out against streaming company’s continued offering of free ad-supported services, or commonly known as ‘freemium’. You know when that annoying advert comes on and disturbs your Spotify playlist, selling something you don’t want?…That’s freemium.

To put into context, over the last few decades we have seen a gradual transformation in how we listen to music. The Walkman back in the 80’s set a new standard in terms of portable music. The iPod in the 00’s went one step further, not only allowing us to easily carry around more music than ever, but also giving birth to the digital download phenomenon with the introduction of iTunes. Streaming can therefore be seen as the ushering in of a new era, utilising the huge smartphone and app market to let people carry not just their own music with them but the entire world’s discography. In the music industry, the debate is therefore not whether streaming is a good thing, but in plain how it should be sold and monetised.

Universal Music Group chief Lucian Grainge has made his stance very clear. He argues that the current ad-funded, on-demand streaming model is “not particularly sustainable in the long term”. Sony Music boss Doug Morris takes the same approach ushering the words: “In general, free is death”.

Others take a different stance, arguing that the Freemium service allows people to trial streaming, and then at some point will inevitably upgrade to the paid service, willing to pay extra for increased sound quality and no advert interruption. In a recent interview with Music Business Worldwide, Martin Mills Co-Founder of one of the largest and most influential independent group of labels in Europe, Beggars Group, argued: ‘The use of free to transition fans from piracy to monetised has clearly been a success – very visibly so in markets particularly challenged by piracy. And the industry would be insane to throw that away right now.’

A moralistic argument is thrown into the mix as well with many artists unhappy about their work being essentially listened to for free. Taylor Swift has exclaimed that Freemium undervalues her ‘work’ and recently yanked her albums from the music streaming service. However, considering this comes from an artist who last year added the sandwich maker Subway to her long and growing list of corporate sponsorships, maybe this is more an economic argument than an artistic one.

The debate will continue and in the end it will surely come down to what makes sense for the music industry in terms of money and wealth. Whether Freemium stays or not, streaming as a whole has proved to be a great inhibiter of illegal music downloads and has reduced artistic piracy, which can only be a good thing. Please let me know what you think and whether you have a different view point on this topic. On that note I’m rather hungry…Subway anyone??

Written by Jacob Kordan

Director of

Twitter: @yourmusicjob

Jacob Kordan
About the Author
Director of