MUSIC streaming site Spotify faces a fan backlash after announcing it will slash the amount of free music available to new users.
The Swedish firm, which was recently valued at more than $1bn (£612m), will limit users of its free service to just 10 hours a month – half the current allowance.
It will also cut the number of times any given track can be played to five, down from 10.
The move has been interpreted as either a sop to record companies, with whom Spotify has been involved in long and tortuous negotiations in the US over the rights to their catalogues, or a further push towards a fully paid model.
Spotify recently announced it has reached 1m paying subscribers but denied it was eroding its free service. It has a total of 6.67m users, the majority of which are subsidised by adverts.
A spokesman said: “It’s vital that we continue offering an on-demand free service to you and millions more like you, but to make that possible we have to put some limits in place going forward.”
In February Digital Sky Technologies (DST) invested $100m (£61.7m) in Spotify, valuing it at a staggering $1bn.
The move raised fears of a second dotcom boom after Facebook’s valuation smashed through the $50bn barrier and Twitter was valued at $10bn.