Spotify updated its terms of service today, and the new terms of service states that those that are using ad blockers to block the ads that Spotify shows to those on the free service, will be banned from the platform.
The music streaming service only shows ads to those on the free version of its service. This is to help off-set the cost of the service, since these users are not paying for it. Those on Spotify Premium do not see ads, so the ad-blocker change in the terms of service does not affect them.
According to the updated terms of service for Spotify, it says that "circumventing or blocking advertisements in the Spotify Service, or creating or distributing tools designed to block advertisement in the Spotify Service" can result in immediate termination or suspension. Basically, if you are looking to block those ads, don't. If you really don't want to see ads, sign up for its premium service, which is $9.99 per month – and there is a student version that's cheaper.
Reports have recently shown that around two million free Spotify users are using some sort of ad blocker to block the ads from Spotify. That is only about two-percent of the Spotify Free user-base. But that is still a large number, and it has likely grown since then – this report came out about a year ago. Spotify had already begun cracking down on users that were using ad blocking tools, but now with this blurb added to the terms of service, it has the right to ban you from using its service. This may seem extreme, but it is needed.
Spotify is one of the first to really crack down on ad blockers, and this is because a lot of other companies are worried about losing customers by doing so. But many know that ads are pretty bad, and not all that intuitive, making the experience far worse. Google has even admitted this, and it is one of the largest ad companies in the world. Ad blocking is bad for the internet, as it takes websites that would normally be free and put them behind a paywall. This is why we are seeing many more companies coming out with subscriptions for stuff that would have been free about a year ago.
The majority of Spotify's users are on the free tier, and don't want to pay $9.99 per month for the service. Spotify would rather you jump to the premium tier since it means automatic payment, and not a range of money being made depending on how much you listen (and see ads) that month. But ads help pay the bill. The other alternative for Spotify here would be to kill the free version of its service – or only allow a short trial period before going paid. And that would drastically drop its user numbers, and also drop its revenue numbers. And for a company that just went public in the past year, that's not a good thing to do.