Music streaming service Spotify will be available free on mobile phones, the company has announced.
Previously only ‘premium’ subscribers, who made a monthly payment, could use mobile services from the music service, but a new, advertising-supported service will now offer mobile access to music.
Daniel Ek, Spotify’s founder, also announced that Led Zeppelin will be available exclusively on the service.
“Today we’re giving people the best free music experience in the history of the smartphone and the tablet,” claimed Ek. “Whether you're going to the gym, or having a party with friends. Just sit back and let Spotify serve you great music for every moment of your life.” He said the new playlists would expand users' experience of Spotify.
Reports emerged last week that Spotify has been negotiating for over a year with the major record companies – Sony, Universal and Warner – over the rates it will pay them to play songs on the free mobile service.
Until now, the free version of Spotify was only available on desktop and laptop computers.
The Wall Street Journal reported that Spotify has now reached licensing deals with all three companies.
“Spotify mobile is no longer for people who subscribe to Spotify Premium,” said Ek. “We see this clearly in our data, the more music you stream the more music you are prepared to pay.”
Users of the free service will still see advertising and will only be able to shuffle their existing playlists, rather than pick individual tracks. Spotify will also offer to extend playlists so users hear more music. Ek said there will be ads "every couple of songs".
The free mobile music service puts Spotify head-to-head with Apple's iTunes Radio, which is currently only available in the US but is expected to launch in the UK and other English-speaking countries by early 2014.
iTunes Radio is free and ad-supported, and features advertising from a number of global brands including McDonald’s, Pepsi, Nissan and Procter & Gamble. Audio advertisements run on the service at a rate of one every 15 minutes, with video ads playing roughly every hour.
Spotify is under pressure from investors to increase the number of people who subscribe to its premium service. It is thought that the free mobile offering could create new opportunities to upsell customers to paid plans.
"Spotify's move to offer a mobile listening experience to users who do not subscribe signifies the company's hope to use the free mobile experience to get another six million people to first try it out for free and then eventually splurge for the on-demand subscription," said Forrester analyst James McQuivey.
"But it's not music listening dollars that they want. It's consumers' time and attention they value. Eventually we'll see music labels give in and allow somebody like Microsoft the option to offer a 'free' on-demand music experience as long as you're an Xbox Live Gold subscriber. The ironic but predictable result will be that we will all listen to much more music, including on-demand music, than we ever have, but we will barely realise that somebody, somewhere has paid for it."
Spotify has come under fire in recent months for paying relatively low royalty rates, compared to the royalties that musicians receive from traditional CD sales and legal downloads.