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Sony CFO says major paying attention to role of freemium in streaming

By | Published on Tuesday 18 November 2014

Kevin Kelleher

Sony Music’s Chief Financial Officer has admitted that the music major is giving some consideration to how freemium fits into the streaming music market in the wake of Taylor Swift’s decision to pull from Spotify.

As much previously reported, Swift chose to pull her entire catalogue from those streaming services which force all artists to make their music available to freemium as well as premium users. The singer indicated that she had no problem with paying Spotify subscribers accessing her tunes, but didn’t want those using the ad-funded free version to have similar on-demand access.

The move kickstarted much debate in the wider music industry on how freemium fits into the streaming music market, and whether having too good free offers devalues music or makes it harder to persuade consumers to start paying for streaming services. Though Spotify boss man Daniel Ek insisted that it was by offering a compelling freemium level that his company had been able to upgrade so many people to the £10 a month option.

According to the Wall Street Journal, Sony Music CFO Kevin Kelleher, while briefing analysts, stressed that the major remained “very encouraged by the growth of subscription-based streaming services”, but said of the freemium debate: “Actually, a lot of conversation has taken place over the last week … what it all really comes down to is how much value are the music company and the artist getting from the different consumption methods”.

He went on: “The key question is, are the free, ad-supported services taking away from how quickly and to what extent we can grow those paid services? That’s something we’re paying attention to as content owners who license our content to the different platforms. It’s an area that’s gotten everyone’s attention”.