(Mark Mulligan, Music Industry Blog)
Extreme monthly discounting, not Taylor Swift, is what’s really boosting Spotify’s numbers, according to top music industry analyst Mark Mulligan. Spotify is currently running four different, deeply-discounted specials, including a 99-cent-per-month trial initiated in early December.
The result is a horde of near-free ‘subscribers,’ many of whom won’t continue once full-price renewals come due.
Indeed, Mulligan sees the 99-cent giveaway as the biggest driver of all. But what about the massive publicity blitz offered by Swift, arguably the largest and most influential artist in the world right now? Spotify’s latest growth spurt coincides perfectly with Taylor’s high-profile pullout in early November (just look at this graph), though Mulligan sees only a ‘modest’ gain for Spotify from the endless amounts of free publicity.
“In fact, the wall-to-wall media coverage of the ‘Swiftify’ debacle actually boosted Spotify’s profile and may even have modestly helped the numbers, ” Mulligan surmised.
Perhaps the answer lies somewhere in-between: Swift likely drove hordes to Spotify’s front door, where Spotify converted users with extremely-discounted specials. Indeed, Mulligan described the four specials at work, one price-choppier than the next. “There are two short term and two long term drivers of Spotify’s December growth,” Mulligan outlined:
- Long Term 1: Student plans – effective discount: 50%
- Long Term 2: Family plans- effective discount: 50%
- Short Term 3: Holiday gifting – effective discount: 100%
- Short Term 4: Holiday 0.99 promotion – effective discount: 90%