Following the rollout of lossless streaming for Premium subscribers, Spotify is adding more flexibility to its free tier. Free users can now search and play any song directly in the app, or listen to tracks shared by friends or artists on platforms like Instagram. This is a major change from the previous shuffle-only experience with limited skips.
Spotify says free accounts will have a daily allocation of “on-demand time.” Once that limit is reached, playback reverts to shuffle mode with limited skips. Premium subscribers, however, won’t face these restrictions.
A Push to Grow Ad Revenue
The company is betting that these new features will increase engagement from free users. Since free accounts are supported by ads, more listening time could help Spotify strengthen its advertising business. CEO Daniel Ek has admitted the company is behind on ad growth, aiming for 20% of revenue but stuck at just 11% as of June.
Lossless streaming, AI Playlists, and Mix remain exclusive to Premium users. Other features, like personalized daylists and the new Messages tool, continue to be available across both free and paid accounts.
Out of 696 million monthly active users last quarter, 433 million were free accounts, while 276 million were Premium subscribers. Free users remain the backbone of Spotify’s audience — and the biggest driver of ad impressions.
What The Author Thinks
Giving free users more control is a clever move. It reduces frustration, makes the free version more competitive with rivals like YouTube Music, and keeps people in the Spotify ecosystem. But the hidden limit on on-demand listening could also frustrate users if it feels restrictive. The company is clearly walking a fine line between making free accounts attractive and nudging people toward Premium.
Featured image credit: Heidi Fin via Unsplash
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