Spotify Announces Major Upgrade to Free Mobile App

Spotify’s free mobile app is getting an upgrade as it goes about continuing to battle with Apple Inc.’s () Apple Music and’s  () Prime Music. 

Spotify Technology SA () , which went public earlier this month, unveiled a free version of the Spotify Premium app in New York Tuesday morning, telling reporters that the new app will give users much of the functionality and controls of the paid version without the cost. An individual subscription to Spotify costs $9.99 a month and allows user to play songs on demand and download music to their devices; previously, the free version didn’t allow for on-demand listening of individual songs. 

The new free version will allow users to listen to songs on 15 personalized playlists in any order and skip as much as they want, and also introduces an option to reduce data usage and simplified tabs to make navigation easier. But it will still contain ads and won’t support downloads. Spotify said the new version will be released globally for iOS and Android in the coming weeks.

At the end of 2017, Spotify had 71 million paid subscribers and was projecting to have between 92 million and 98 million by the end of this year. Its ad-supported free service is an important channel for acquiring paid subscribers, with Spotify claiming about 60% of its gross subscriber adds in recent years have been former users of its free service.

“The more you play, the more you pay,” said Gustav Söderström, chief R&D officer, on Tuesday.

The event featured presentations from Söderström; Babar Zafar, vice president of product development and Troy Carter, global head of creator services. Söderström said the company has seen increased engagement on the new free app compared to the old version.

Spotify stock was down0.9% to $156.76 after the news was announced on Tuesday morning, putting its market capitalization at $27.9 billion.

The music streaming giant went public on April 3 through a unique direct listing. The stock opened at $165.90 before declining in the afternoon to close at $149.60, still above the New York Stock Exchange’s “reference price” of $132.

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