Before you get too comfortable with Spotify, know that it's free awesomeness won’t last.

If it is too good to be true, it is probably... Spotify.  You may have been unaware, as I was, of the limitations that will be imposed within a few months of use. So unless you plan on paying for the service, you should read this, as I hope to clear up some of the confusion, so the less informed will know what is up.

Read the fine print: After 6 months there are serious limitations.

Once you have used the free version of Spotify for 6 months you will be subject to the following stifling limitations (unless you begin paying for the service):

1                     A limit of 10 hours of use per month,

 and

2                     A limit of 5 listens to any song, FOREVER! (until you pay).

This essentially continues to allow you to have endless, free, access to a service which has been rendered practically useless. 

What does this mean? 

If you do not intend to pay: What is your favorite song?... You can listen to it 4 more times. Your favorite playlist is now nothing more than a list of songs you can no longer listen too! [I assume you can still use it as music player for music you own, if you don’t already have a better program (iTunes, Winamp, Songbird, etc).]

So what is my point?

Enjoy Spotify while it lasts, but do not get too excited about it being an awesome free service. Spotify’s business plan is quite brilliant: Offer a great service, rope in users, get them accustomed to the ease of Spotify for six long months, have them invest time in their profile and share-able playlists, and then render the best features useless, until you pay.

There is nothing wrong with this business plan, except they have been misleading users by burying the limitations in their Terms of Service, which of course no one reads. And that is what gets my goat.

What are the versions of the service?

• Free version: Works great with ads for 6 months. Then it essentially becomes a piece of software for previewing new music.
• Unlimited: $5 a month gets you no ads and no limitations (obviously, because you paid)
• Premium: $10 gets you amazing features. Any (available) song, anytime, anywhere, and on any device. There is even an offline mode where you can download 3,333 tracks and take them with you. A pretty freakin’ sweet service.

How does Spotify make money?

Spotify offers free music and makes money by selling advertisements. They then keep some of that cash, and pass most of it to the music conglomerates who share the tiniest little fraction to artists.

Artists making money is a farce.

Although you may think you are passing some 'internet-money' along the artists, the actual amount is minuscule. It is no doubt based on some complex algorithm, but the end result is that artists still get virtually nothing. Spotify refuses to be transparent about this (most likely because it is embarrassed that it runs ads boasting artists make money from Spotify) but it has been leaked that the going rate at about 0.001 to 0.002 cents per play.  That is one-thousandth of a penny per play!

Lets put that absurdly tiny amount into perspective. Assuming an average song length of 2 minutes, if you play a single artist ALL DAY (24 hours straight), they will make between 0.7 and 1.4 cents!  An entire weeks worth of play (24/7) will earn them about 5 to 10 cents! So in all of your play time, you have earned your favorite artists less than a penny.

How vast is the library?

There are a reported 15 million songs available on Spotify. That’s a lot, but not nearly all (with some major omissions). And let’s not get too comfortable. There is no reason to think the library is static as many music labels have already dropped out.

Just recently an electronic music distributor STHoldings pulled 234 labels from Spotify, noting that services like Spotify “cannibalize the revenues of more traditional digital services.” No kidding, since certain independent music is so off the radar (read as: not pirate-able), that it is usually only available via paid download. So it is very likely the amount of available independent music will continue to dwindle. Most large labels are still trying to decide if this will make them enough money. Here is the list of major Labels that are in.

Spotify and the Music Industry

The music industry is the poster-child of an outdated industry, desperately trying to ride out its sinking-ship business model as it drowns in the internet’s vast oceans of potential. Along comes Spotify (the life preserver in this drawn-out metaphor) to help the music industry float on a bit longer. The potential offered by Spotify could have an immense impact on the drowning music industry. 

At first glance it appears that Spotify could be the saving grace for the music industry. It offers such easy access to music, that it even makes music piracy seem like an inconvenience. In this capacity it has duel benefits to music industry; it curbs music downloading and directs those retired Pirates back to a revenue-generating model.

Bowing to pressure from the music industry, who were demanding more money (sooner), Spotify has altered its Terms of Service and halved the original amount of limited hours from 20 to 10 hours per month (after 6 months of use) and implemented the 5 song limit. So let’s not be deluded into thinking that the music industry will allow itself to benefit from the very thing that could save it.

It may very well be that the Spotify model is already eroding: Large labels are tightening their grip to squeeze out a quick buck, and the small labels are starting an exodus that could snowball.

In Summary:

If you can afford the monthly fee, the service provided by Spotify is superb. My real issue is that their free model is nothing more than a trap, into which they are more than willing to lure users by misleading them. And I do believe they are misleading users.

Do not get me wrong; the very idea of having access to most music for a mere 5 to 10 bucks a month is revolutionary. Who could possibly balk at that deal? I will tell you who. People who can have ALL the music in the world for free (and not to mention commercial free) with just a modicum of extra effort. Those people have been sailing freely across the internet since its creation. They are known as Pirates. So, as the music industry punctures holes in its own life preserver, the Pirates are re-boarding their vessels.