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The Free Version Of Spotify Is About To Get A Lot Better: What Changes Are Coming?

User growth is critical for Spotify’s business, especially now during its IPO journey. As such, the company will make its service much better for free users, who are most likely to be turned into paying subscribers.  ( Spencer Platt | Getty Images )

Reports claim that Spotify is gearing up for an improved version of its service for free users. The company, which most recently filed for an IPO, is poised to announced the changes on its April 24 event, where it'll also unveil its first hardware product — possibly a car music player.

The enhanced free tier is set to become Spotify's biggest change since filing for an initial public offering earlier this April. The free version is set to be easier to use, especially for smartphone users, reports Bloomberg, citing people familiar with the company's plans.

Spotify Will Revamp Its Free Service

The report adds that the revamped service will allow free listeners to access playlists faster and have more control over what songs they hear on top playlists. This seems to suggests that free users will be able to pick what songs they want to listen to, unlike the current free tier which only lets them listen to playlists in shuffle mode. Picking whatever song you want is one of the exclusive features served for Premium users, in addition to offline downloads, ad-free listening, and unlimited skips.

Spotify IPO: Why A Better Free Service Is Crucial

Spotify is in a critical position now that it's gearing up to become a publicly traded company. It needs to rake in new customers to satisfy investors who value audience growth over anything else. Also, those new customers, on top of old ones, need to be convinced to stay, and a much-better free tier is one such way to make them continue as patrons. The free users are crucial for Spotify's business because they're the ones who can be converted into paying users later on. A monthly subscription costs $9.99, but it varies by country.

Bloomberg notes that less than half of the company's customers are premium users — yet 90 percent of Spotify's €4.09 billion revenue in 2017 was generated by its free user base. Thus far this model has worked well. The company had a whopping 157 million users by the end of 2017, 71 million of which are premium users. That makes Spotify the biggest music streaming service to date.

The company hopes to balloon its user base to 200 million by the end of this year, and it forecasts 96 million of those will be paid subscribers. Apple, Google, Amazon, Tidal, and Pandora are all vying to capture significant shares in the music streaming landscape.

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