Spotify is reportedly revamping its free, ad-supported service, with the aim to make it easier to use - particularly for those on a mobile device. This is according to sources within the company that have been briefed on the matter. The plans are still private, but according to Bloomberg, the plans should be announced in the next couple of weeks.
According to this report, the updated free service would allow mobile users to quickly access playlists, and also have more control over what songs are playing. This would bring the free service closer in line with its paid service, that is priced at $9.99 per month. Now Spotify's free service is a pretty important part of its business, as it's a way to steer new users into its ad-free product, but ironically, around 90-percent of Spotify's revenue in 2017 came from the ad-supported platform. That is mostly due to the ads that play during those listening sessions. The ad-supported group of customers are smaller than the ad-free group. So the likely difference here is that the ad-supported users listen to more music, thus hearing more ads and generating more revenue.
Spotify is hoping to get up to around 200 million listeners by the end of the year, and this revamped free service would be the first step that the company is taking to get there. Having just gone public on the New York Stock Exchange last week, the company is looking to keep investors happy and continue to raise capital. Currently, Spotify's market cap is around $27 billion, which is pretty impressive, and puts it way ahead of Pandora - who went public a few years ago and has been reduced to a stock price under $5. Many were skeptical of Spotify being a good investment since it is competing with tech giants like Apple, Amazon and Alphabet, but it's holding its own on the stock market. And adding more users will definitely help that.