I don't get why anyone would use the free tier - not being able to choose songs would actually drive me insane, let alone the ads - but $11 monthly for essentially all the music anyone could ever want, plus solid playlists and recommendations, is a perfectly good value for me. Admittedly, I listen to music all the time and it's a pretty big part of my life, so it's an easy sell.
I guess the free tier is still an improvement over radio, but regardless, producing and distributing music has costs, and I'm more than happy to pay for it. Given that Spotify isn't even profitable, having lost about a billion dollars last year, I'm not sure how long this situation will last, but for the time being, I really don't mind it.