Ministry of Innovation / Business of Technology struggles for streaming, international revenue is struggling to generate revenue in some parts of the world, so a …

Music streaming community has made some important changes to its services with the intention of generating revenue. The struggling ad market has forced the CBS subsidiary to require subscriptions in many international markets, and streaming to third-party apps is now being restricted to subscribers. The honeymoon of "free" streaming music appears to be ending.

As announced on's blog, the company will soon require most international users to purchase a monthly subscription to use Radio. Users in the US, UK, and Germany are excluded, but all others will need to begin paying �3.00 per month on Monday, March 30 if they hope to keep rocking out. boasts a global user base of 30 million monthly users (double what it was just a year ago) and, as you might guess, many of them have already expressed dissatisfaction over no longer having free access to the company's seven million tracks. used its forums to let users know that the company is also changing the rules for third-party streaming apps. First, only subscribers will be able to stream music via these apps unless developers negotiate something directly with The obvious justification for this rule is that the company "need[s] to get the money to cover royalties," the forum post reads.

The second new rule for third-party apps is that they will not be able to stream to mobile phones or, perhaps more accurately in this 21st-century gadget landscape, over cellular networks. blames this on limitations in its licensing agreements, though it may be able to "make an exception" if developers plead their case. But, unless those developers act fast, unofficial apps for Windows Mobile, Symbian, and BlackBerry will stop working next week.'s official clients for iPhone and Android will reportedly continue to work without requiring a subscription.

Third-party apps that allow users to "scrobble" (or share, in mundane English) information with about music played in various media players will "always be free," and this is no surprise. Collecting information about community and user behavior is a business model in and of itself for companies like

Naturally, all manner of complaints have been lodged in the comment threads, with many saying that has sold out and willingly destroyed "thousands of free development hours." On the road to generating revenue out of a "free" service, though, these bridges sometimes need to get burned. Since CBS acquired for $280 million in 2007, it has been looking for a way to boost the music streaming community's profitability. In December, 20 percent of's staff was let go. While the company does not elaborate how its users are distributed, its US and UK operations are presumably still generating enough revenue (via ads and optional subscriptions) to avoid imposing this requirement—at least for now.

Licensing seven million tracks is no small financial feat. Even Pandora, a streaming music competitor, took a page from traditional radio's book in January this year and introduced ads that run in between songs. All things considered, it may simply be time for costly Web services to start exploring other business models more aggressively.

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8 Reader Comments

  1. Is licensing music really that costly?
    20 posts | registered
  2. Time to move to other ad support options. LIke the pirrate babe/.
    598 posts | registered
  3. If you're a user please consider joining this group: . I apologize beforehand for the link if someone thinks of it as spam but is not. We're trying to find alternatives as well. Thanks for your time guys.
    3 posts | registered
  4. If it means that they will actually make the entire library available outside those regions then it may be worth it. As it is today I play music in Spotify and scrobble to I then use to get better suggestions and plug those suggestions back into Spotify as I can't play them from
    3242 posts | registered
  5. Just use Spotify and be happy Wink

    (yes they have ads between songs so hopefully they stay in business)
    53 posts | registered
  6. They stabbed their users in the back. The users built this huge database of music listening habits and now CBS is turning around and selling it back to the very users that helped build it. has disabled commenting on the blog post because so many people were angry about this issue. Telling the vast majority of your users that they're not good enough to use your service for free is a horrible PR move.

    I can't believe the coverage that Ars is giving this. I have a feeling if you lived in Canada you'd be writing a very different article.
    107 posts | registered
  7. @bjornstar: yes, they used us. Like the original creator of The Dark Knight's Joker said: "When you play in someone else's sandbox, they get to keep your castle"
    3 posts | registered
  8. I'm Canadian and a subscriber to Last August I forked over $36 USD to subscribe, not a lot for the ability to listen to my favourite tracks, create playlists and listen to them and to get rid of ads.

    While I can understand them wanting to make more money (they are a business), and I can understand them moving some of their currently free services (namely radio in this case) to paid services, what I don't understand is why they do that in addition to making it more expensive at the same time. Why not just make all radio subscriber-only and leave the subscription price the same? Like I said, I paid $36 USD last August for a year's subscription. With the rate hike to 3 Euro a month that's currently $48 USD a year for the same service I get now. Get people who want to listen to radio to subscribe, that's fine, but don't sucker-punch people who've already been paying for the privilege of radio.

    Admittedly I don't know their operating costs so doing both things at the same time may be necessary, but it definitely feels as though I'm being shafted and that's enough for me to throw in the towel. As it stands I have no intention of renewing my subscription come August.
    114 posts | registered

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