Race to the Bottom? Spotify Launches a 99-cent Premium Subscription Trial

GettyImages-171659784

Is there any question why per-user royalty payments are steadily declining at Spotify?

If you’re based in the US and haven’t previously signed up for its paid service, Spotify is now offering 3 months of its premium service for just 99 cents. 

The usual charge is $9.99 a month, so customers are being treated to a drastic 90% cut.  Similar to its previous offer, the regular rate returns after the three-month window.  Upgrading to Spotify’s premium tier eliminates advertising, introduces higher bit rates, and offers the capability to download music for offline (‘cached’) listening.

The late-year stunt could be an attempt to jack paid-subscriber totals before 2016 strikes, among other aims.  For starters, the similarities to Apple Music’s three-month free trial is obvious.  Apple’s trial proved solidly successful, with Apple Music now boasting more than 6.5 million paying subscribers. That’s bigger than the respective totals at Rhapsody, Deezer, and Tidal, though it still lags behind Spotify’s 20 million subscriber count.

On the free side, Spotify has most recently reported that 55 million people use the ad-supported version. That number is growing quickly, and Spotify estimates that its monthly user tally will push past 100 million by the end of 2015.

 

However, Spotify has some stiff competition with Apple, including Apple Music in its new mobile operating system, iOS 9. The update was installed (or pre-installed) on an estimated 500 million iPhones and iPads within a week of its release.

6 Responses

  1. Anonymous

    Pretty much every music service is doing this. Spotify, Rhapsody, and. Apple (free). I know Google Play had a similar deal a while back.

    It’s the Holiday rush. Online music listening always soars in December due to the holiday music crowd. Premium memberships make easy Christmas gifts. And Rdio customers are looking for a new home. This is the perfect time to roll out the discounts and rake in the subscribers.

    Reply
    • FarePlay

      Yes, pretty much every music service is doing this and that’s the problem. I mean really, what’s the difference between these services and online piracy? Both are for profit, but in the case of ‘legal’ interactive music streaming the only difference is the potential pay-off is much higher and a tiny payoff for working musicians and songwriters. Isn’t this the deal Napster was working on fifteen years ago?

      So while we sit back and watch these services destroy the careers of artists, they are all playing a game of musical chairs. I don’t know how quickly Spotify is burning through their latest half billion, but unless they can spin it and float an IPO they’re toast.

      Anonymous: “It’s the Holiday rush. Online music listening always soars in December due to the holiday music crowd. Premium memberships make easy Christmas gifts. And Rdio customers are looking for a new home. This is the perfect time to roll out the discounts and rake in the subscribers.”

      Yeah, everybody’s looking for a three dollar christmas present. Besides, ad-supported growth has not proven to be a good thing for these guys, they lose more money.

      Spotify will need to pivot on their core business to survive and in their wake they will leave behind a broken music business that will take years to rebuild.

      Reply
      • Anonymous

        There is really no reason for trials to last 3 months. If you are not interested after 30 days chances are you won’t be after 3 months. It’s time to end these deals.

        Ad supported should be restricted to non-interactive only. Love or hate Pandora the only damage they have really done is hurt terrestrial radio. Which isn’t really all that bad when you think about how terrestrial radio has basically become a vehicle of playing nothing more than canned major label crap. On demand music from Spotify and Youtube has done irreversible damage to every corner of the music industry.

        Reply
  2. Ray Miller

    This deal has been available for sometime now, I know a bunch of people, who get the 3 months for 99 cents, then cancel,then use a different card to get another 3 months. Between this scam and people paying the college rate, I bet half their paying customers are not paying full price.

    Reply
  3. Jane

    There should be a worldwide database that lists all songs, everything, the lot, which streaming services must pay something per listen, at a fair rate, (say after a 30 second listen) directly to the songwriter (not their label). If some new system is not put into action, there will be no music industry.

    Reply
  4. DavidB

    I haven’t followed it closely, but I think this scam – sorry, scheme – has been running for most of the last year.

    Of course, if Spotify want to run a loss-leader scheme, that’s their business. Provided that like any other business they pay their suppliers in the usual way. If a supermarket wants to sell bread at half the usual price, they still have to pay the bread suppliers at the standard wholesale price (give or take a haggle or two). Does the same apply to the music industry, and if not, why not?

    Reply

Leave a Reply

Your email address will not be published.

Verify Your Humanity *