Price increases on Spotify and other streaming music services could bring people back to online piracy

Price increases on Spotify and other streaming music services could bring people back to online piracy

As with competitors like Apple Music and Amazon, Spotify has kept its prices at the now common price of £ 9.99 for years.

Other plans were introduced – like a more expensive family subscription and an upcoming higher tier – but the base price was not adjusted.

Otherwise, there would be a risk that his customers would illegally download music again, a representative said during an official hearing on the economics of streaming.

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Horacio Gutierrez, head of global affairs and chief legal officer at Spotify, warned that it was important to ensure that paid music streaming “does not become unaffordable for consumers” or else they “run the risk of being pushed back into online piracy” become”.

“Prices have increased in some areas and increased in some markets, especially when it comes to family plans, and I think we would expect that,” he told MPs.

“Even if you watch Netflix, you will see in its history that price increases did not come about until many, many years after the streaming service started.

“The balance we need to find is one where music doesn’t become unaffordable for consumers and push them back to online piracy scenarios.”

Representatives from the three companies were also asked about the impact of Google-owned YouTube, which allows more content to be made available for free.

Elena Segal, Apple’s global senior director for music publishing, said it was “a challenge to compete with Free”.

“It has always been a challenge whether it was legitimate or illegitimate,” she said.

“It is a challenge to exist on an uneven playing field.

“They (YouTube) don’t necessarily have and don’t have to license all of the music they use.

“And even if they have licenses, the amount they pay is less because of how their business model works and how tariffs work.”

Elsewhere, Spotify was also asked about its podcast deal with the Duke and Duchess of Sussex.

Gutierrez said podcasts are “a completely different economics” than the music side of the business, but said investing in podcasts benefits overall music consumption.

“As with many of our services, there is a market for certain talent because they have a certain consumption,” he told MPs.

“We can’t deal directly with artists like we do with podcasters or people who create podcasts, so the structure of this market is very different.”

He added, “The product will be rated based on how many users it can attract, how many streams it will attract, which in turn determines how many advertisers are willing to advertise on the podcast, which determines the economic opportunity. There is a market for which talent arises in this regard. “

When asked by Steve Brine MP whether Harry and Meghan saved the music industry, Mr. Gutierrez replied, “That seems a little premature.

“It’s not the only act we’ve signed, we’ve signed dozens of them and we will continue to do so.”

Additional coverage by the Press Association

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