Spotify Announces Free Mobile Service, And Snares Led Zeppelin Too

Spotify is changing things up.

At a news conference in lower Manhattan on Wednesday, the company announced that members will now be able to listen to their own playlists for free on mobile devices. Previously, listening to anything outside Spotify's Internet radio -- a feature that was only available in the U.S. -- on mobile devices required a Premium subscription of $9.99 per month.

Free mobile listening will be ad-supported. Listeners won't be able to choose specific songs on demand or download music for offline listening, as they can if they are Premium subscribers. Rather, they will be able to listen to shuffled versions of playlists they create.

Spotify also said that its free desktop and web service, which consists of unlimited and on-demand streaming of songs, will come to iPads and Android tablets. That service is also ad-supported.

"I think we've really unlocked music from people's home computers, which is where we began," said Daniel Ek, the co-founder and CEO of Spotify.

The company also announced on Wednesday that Led Zeppelin, which until now had not made its music available for streaming, will stream exclusively on the five-year-old service.

"I know I'm not alone when I say I can't wait to get the Led out," said Ek.

The news comes at a time of intense competition in the digital music space. Pandora, the Internet radio giant, boasts over 72 million active members, and this year Apple launched competitor iTunes Radio. Google launched a subscription streaming music service in May, and headphone maker Beats Electronics and YouTube are also expected to enter the market in the near future.

Spotify hopes to lure subscribers by licensing exclusive music deals and making limited versions of its service available for free on more devices. Spotify inked an exclusive deal with Metallica last year.

Spotify says it has over 24 million active users, 6 million of whom are paying members.

The company, valued at $4 billion, recently secured $250 million in funding and is under intense pressure from investors to increase its subscriber base and revenue, said Mukul Krishna, the senior global director for digital media at Frost & Sullivan, the consulting firm.

"What they want is to give people a taste of Spotify on a mobile device and hopefully translate that in a period of time to paying subscribers," said Kirshna.

Ek acknowledged as much in the news conference.

"The more music you play, the more you're likely to pay," he said. "And the more of course likely you are to upgrade to Premium. Premium remains the ultimate music experience."

The company is also looking to increase advertising revenue by targeting ads to the new group of people it hopes will join, said Krishna.

Even though Spotify made $578 million in revenue in 2012, it was not profitable, according to The New York Times.

In the U.S., 28.5 percent of mobile phone users listen to music on their devices each month, and that number is expected to increase to 41.4 percent by 2017, according to eMarketer.

Spotify will continue to have three tiers of service: Members can listen for free on desktops, and now on tablets, though they hear ads. A $4.99 monthly subscription gets rid of those ads on desktops, and the $9.99 Premium option allows members to stream and download music -- free of ads -- on multiple devices, including tablets and smartphones.

CORRECTION: This article has been updated to reflect that Spotify's Internet radio service was previously available for free to U.S. members.