I don't think they had to bargain with labels for this. They previously had unlimited free streaming - I think they chose to limit it to see if it would increase subscriptions. It's possible they were forced to do it by the labels but personally I don't think that was the case (although I have no evidence).

They probably just observered listening habits. I'd fire up Spotify, listen to it for a day or two, then hit the limit (that I always seem to forget exists). And just switch it off for another month or so. Limits or adverts would suit me. I hate, hate, hate the ads, and soon tire of the free service. My laptop's sound is pretty horrid that it's not worth me buying the subscription, but Spotify is still useful as a sampler.

Unless I'm misunderstanding something you're actually an example for why this would be a bad business decision for them. Even though you use the service a lot (max your limit in two days) and hate the ads, you're still not willing to pay it. Now with limits removed you will be using more of their resources for nothing in return.

I will listen more now, but that's probably a good thing. I barely used it in the past because of the limit (no idea what it was, but I'd hit it). As I said if I had a higher quality audio device to listen to songs on, that could handle Spotify, I'd most likely buy a subscription.

I don't know why they don't just randomly make tracks unavailable for free accounts. Or they could remove two or more songs from each album. I didn't even mind the 5 plays of a song limit. The adverts are pretty annoying, but I take them on the chin in exchange for the music.