The streaming platform reported that about 2 million people are blocking ads through apps or modified accounts.
Spotify has 2 major tiers; a premium subscription-based tier, and a free ad-supported tier. That being said, The increase in ad block users is not good news for these platforms. With the high cost to maintain these streaming platforms, having an “ad-free” experience generates $0 revenue for Spotify and its various rights owners. With ad blocking as an option for free content, there is no incentive for users to upgrade.
The main focus for the ad-supported tier is to have users transition to the ad-free premium content. “The ad-supported service is also a subsidy program that offsets the cost of new user acquisition,” Spotify CFO Barry McCarthy relayed back in March. He also stated It takes about 12 months to recoup the losses incurred by an ad-supported customer — starting at the point when the customer transitions to paid
Of course, Spotify is not just letting these users sap money away from them. They started to invest in technology that is able to detect the ad-blocking users.
Spotify Is Taking this issue head on, they are giving a clear warning to ad-blocking users before suspending or taking any other disciplinary action.
Like many other publishers, they are taking measures against ad-blocking
Digiday published, Spotify is now suspending listening for users found using ad-blockers, while gently coaxing them to do the right thing.
This is the warning an ad-blocking Android user received:
“We detected abnormal activity on the app you are using so we have disabled it. To access your Spotify account, simply uninstall any unauthorized or modified version of Spotify and download and install the Spotify app from the official Google Play Store.”
Speaking to Digiday, Spotify said:
“We take the artificial manipulation of streaming activity on our service extremely seriously. Spotify has multiple detection measures in place monitoring consumption on the service to detect, investigate and deal with such activity. We are continuing to invest heavily in refining those processes and improving methods of detection and removal, and reducing the impact of this unacceptable activity on legitimate creators, rights holders, advertisers, and our users.”