Spotify Now to launch tonight?

Speculation is that Spotify is launching a new music and video-on-demand streaming service called Spotify Now in New York tonight (Australian time).

CNBC News, using unnamed sources, said the new product could come with customized and modifiable playlists based on different moods and activities. It will be have a more interactive user interface than the current Spotify platform.

A feature for the sports-inclined is that Spotify Now will allow users to sync music with the pace of their jogging or running or workouts.

Whether all these features will be included in the launch, or introduced in stages, remains to be seen.

But if the idea of tonight’s supposed launch is for Spotify to get a jump on the Apple Music streaming service, it would be expected it would arrive with all guns blazing.

Further speculation surrounding Spotify is if it might consider the option of abandoning its ad-supported freemium tier.

According to Digital Music News, Universal Music Group and Sony Music Entertainment are pressurising it to adopt a model where new users can stream for up to three months free before having to take out a paid subscription. Current users would have a six-month period.

The two labels have apparently suggested that their artists can decide if their music is to remain free on the platform.

But not all record companies are against freemiums. There is the fear that its disappearance could lead consumers to return to pirated sites.

Last week, Warner Music Group’s CEO Stephen Cooper warned at an investor call, “To be crystal clear, piracy is zero revenue, it’s the theft of intellectual property, and it’s not good for anyone. So all of these models are better than piracy, that’s number one. So I think that before people conclude that freemium should be burnt at the stake, we should think very carefully about the consequences.”

Merlin Network, the consortium of leading indie labels, also issued warnings.

Its CEO Charles Caldas told one media outlet, “Treating consumers like children and telling them that everything they’ve enjoyed about these streaming services is going to be taken away because the biggest record companies don’t like it, that’s another Napster moment.

“The major labels screwed Napster and screwed the market by killing what was potentially the biggest opportunity the industry could imagine in getting into the digital space early. If they follow through with this, they are going to do it again.”

Not all independent labels are worried about the piracy threat. Ministry Of Sound’s Lohan Precenser has bluntly stated that streaming services can’t use the “we are the “antidote to piracy” argument because they pay labels so little from free services.

At the Mobile World Congress in March, Precenser said, “My beef continually over the last few years has been with the free aspect, the freemium model. I just can’t see how that is sustainable or supportable. The argument goes that by making a free ad-funded service available, you give the pirates an alternative. I just don’t buy it.” He suggested an option where casual music listeners are offered the chance to just “snack” without having to go to subscriptions.

He added, “The reality of some of the bigger streaming services is that 75% of their user base [is] free, which has a horrific impact on the music industry and its ability to invest in talent going forward.”

Spotify has officially denied it is even considering a move to abandon freemiums, saying its “model is working.”

However Spotify must be under pressure, with Apple Music agreeing not to have a free-tier. In return for exclusives and previews. It is using the fact that by the end of March, unit sales of its Smartphone reached 61.2 million.

To date, Spotify users’ record of moving to paying is not impressive. By January 2015, of its 60 million users, only 15 million had taken out paid subscriptions.

Losing the licensing deals of the three majors would decimate Spotify’s appeal. It is well aware of this, which is why it is offering huge cash advances and/or equity stakes (up to 15% across the labels) to ensure their licensing continues.