Heres a recap: In April 2011, at the behest of certain music rights-holders, Spotify agreed to place severe caps on ad-funded listening in five territories Sweden, Finland, Norway, the Netherlands and Spain.
Less than a year after it was introduced, the plan fell apart and these limits were lifted.
Why? Because it was a disastrous move.
Before this point, the listening and revenue curve of Spotify was going up really nicely for [PIAS] and many other companies in Spain a market where piracy had previously destroyed legal musics financial worth like an angry swarm of digital locusts.
Finally, it seemed, we were on the road to recovery.
Then Spotify agreed to clamp down on Spanish consumers. Most jarringly, free users could only listen to individual tracks five times before they were left unplayable.
(In addition, they could only listen for a maximum of 10 hours ad-funded Spotify per month after a set period a further restriction that was eventually dropped in December 2013.)
Can you guess what happened?
Thats right: streamings magical, encouraging growth curve in Spain fell off a cliff. It took revenues 12 months to recover.
Interestingly, we now generate significant subscription as well as ad-funded revenues in Spain.
Whilst ad-funded remains higher, Im convinced that the existence of ad-funded streaming is a reason for paid subscription growth: free use is part of the journey to paid use.
Todays whispers of Universal and others putting pressure on Spotify to repeat the same mistake is scary stuff.