Spotify Is Now Offering 3 Months of Premium for 99 Cents…
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I mean, isn’t this good? How many people are going to enjoy it/forget to cancel and just let it roll over? Probably a good amount. You want people to subscribe to Spotify, here’s one way to do it. They should have been doing this since day 1.
What f’ing geniuses these guys are… Double down on what is already NOT working… [facepalm]
the bigger question is, who eats the discount? spotify or the labels/artists? hmmmm….
I mean, they haven’t even tried any meaningful trial version, at least in years. So it’s not doubling down, it’s actually doing something for once. Everyone eats the discount, via the payout model, but it’s also bringing in money. If you already had a trial, you cannot sign up for 99 cents. So all these people paying 99 cents had previously been paying zero.
My thought, as well. I see nothing wrong with a bunch of people forking over 99 cents and maybe getting hooked. Even if they cancel, yes, 99 cents is better than nothing.
DEVALUATION AGAIN. Paul I had the same thought. I’ve never seen a company more inept at marketing than Spotify. Ek, etc. have simply re-packaged Napster.
Sean Parker must have been jumping for joy when he found out about these guys. In some twisted world it validates his vision of free P2P file sharing. But if he thought he was ‘fixing what he broke’ he is seriously deluded.
To GGG’s point. Yes these ‘specials’ do get a percentage of sign-ups who forget to cancel. But it’s kind of a scam if you think about it.
Yeah. Their so terrible at marketing. Damn billion dollar business.
Yeah Adam, you can actually say that when they’re making and figure out how to pay their vendors properly.
If you want to call trials a scam, then sure, every website with a subscription model is a scam, that’s fine. And the article should attack all the other services, too.
And yes, Spotify’s marketing does suck. I’ve always said that.
Valid point GGG. Spotify is only one.
What’s funny is I’m hearing/seeing complaints that the scummiest part of it actually brings in more money haha. For example, if you were part of a trial, even years ago, the default price is still $9.99, even if you click the 99 cent link.
Not sure if that’s just a site error or Spotify pulling a fast one. I’m sure both are equally as likely.
You really will take every chance you can to give Spotify a black eye.
This sort of a promotional deal is very common among subscription services. From existing music subscriptions like Rhapsody to video services like Hulu. Other industries like magazines and newspapers have done similar promotions with a lot of success. The point is to give customers who have not been enticed to subscribe by simple 1-week or 1-month trials an extended trial without simply giving it away. That $1 charge gives customers the feeling that they got a good valued bargain rather than simply a free trial they often times with just shrug off. Plus it filters out the never-going-to-pay customers and the abusers.
Timed strategically with the holiday season this promotion could be a real success.
Casey
“That $1 charge gives customers the feeling that they got a good valued bargain rather than simply a free trial they often times with just shrug off. Plus it filters out the never-going-to-pay customers and the abusers.”
Important point, there. Requiring customers to give their CC information for the promotion ensures a higher potential for conversion to fully-paid customers. Those who like the service and might decide it’s worth the full $9.99 price don’t have to do anything else. Those who don’t want anything but the $.99 service have to actively go in and cancel the account that is already established with their payment information.
But you recognizing that would require something beyond the blinding opposition to Spotify and streaming you laughably evidence, daily.
Your constant free use of creative commons imagery on this site is seriously devaluing the work of photographers the world over, much more than Spotify is, with this campaign.
Hey DMN: Thanks for helping market for Spotify – I just signed up for this 99 cent deal!
You know what “promotion” means, right?
Careful, it’s getting slippery in here. Are half-priced student plans a big ‘promotion’ then, too?
Don’t forget the ‘family’ plans.
Family plans actually seem to make a lot of sense. It is a good way to get additional revenue from gaining more users as well as cutting down on the number of shared accounts. $15 for 2 people is better (for artists/labels) than $10 for 1 person using Spotify or $10 for 2 people sharing an account.
Wow. this is absolutely groundbreaking news. I service giving limited-time price reductions in order to promote the service and hopefully turn some of them into full-paying customers.
Spotify obviously came up with this one-of-a-kind, evil plan all by themselves, in an unique effort to singularly devalue music…
Three months of OnStar service – for FREE – https://www.onstar.com/web/portal/preowned?g=1
Three months of Hulu Plus – for FREE – http://www.hulu.com/plus/content?from=sony3
Three months of subscription to Scribd – for FREE – http://www.teleread.com/book-subscription-services/want-try-scribd-free-3-months/
Three months of XBox Live – for FREE – http://www.microsoftstore.com/store/msusa/en_US/pdp/Xbox-Live-3-Month-Gold-Membership/productID.288508200
Three Months of Samsung’s OnLive Gaming Site – for FREE – http://www.engadget.com/2014/10/16/samsung-galaxy-note-4-onlive-free/
and the list goes on….
What will DMN “report” on next – the incredible “news” that the more popular tracks streamed on Spotify happen to be the ones that are promoted by their labels?
Well, it’s all fine and dandy, if Spotify are paying for this out of their own cash. But what are the chances that ‘content providers’ are picking up most of the tab? If content providers get 70% of Spotify revenue, as Spotify always claim, then unless there is some special provision to compensate them, they are carrying 70% of the cost of the promotion. Let’s work it out: on the free tier ad revenue apparently averages around a tenth of the revenue on a paid subscription, which for 3 months would be a tenth of $30, so someone who switches from free to 3-months’ premium for only 99 cents is cutting Spotify’s revenue by about two-thirds. Which again is fine if Spotify are paying for it, but what’s the betting they are not? I think we should be told.
Someone somewhere along the line probably is being told. Services usually do lay out the terms for promotions/trials upfront. I know TuneCore used to list the different services on their website and they stated that royalties for streams that occurred during a promotion or trial were reduced or even eliminated for most services. But could have changed and 3 month promotions may be handled differently than the normal 1 week to 1 month trials.
I would be surprised if Spotify wasn’t going to pay more than $0.70 or $1 over the course of 3 months.
It occurs to me that I understated the loss of revenue resulting from the 99-cent trial offer. In the absence of the offer, some significant proportion of the users taking up the offer would have switched to the premium tier anyway. In these cases, the loss of revenue is approximately $29 per case, and the lost revenue is never recovered, because even if the users continue with the premium tier at the end of the trial, they are only paying what they would have paid anyway.
There will still be a long-term gain in revenue if enough users are persuaded to switch to the premium tier who would not have done so otherwise, but the economics do not seem very bright. How many people will stay on premium after a 3-month trial who would not also do so after a shorter and less costly period?
Gee guys, thanks so much for teaching me about this ‘promotion’ thing. And here I thought I knew everything about free market capitalism! I guess I’m always learning.
And wowee, look at all these other business concepts I’m also stumbling upon!
(a) Massive, protracted content devaluation via reverse stair-stepping
(b) ‘Businesses’ with billion-plus valuations and ‘hyper-compensated founders’ predicated on ‘saving’ entrenched businesses from piracy.
(c) Pro-artist narratives that obfuscate broken payout mechanisms and private, valuation-hoarding partnerships
(d) Archaic digital copyright laws breeding massive, industry-ballooning loopholes at the expense of content creators.
Gee whiz!
You bring it on yourself.
Guaranteed if we go back through the annals of Spotify discussions on this site we could find you supporting to some degree the idea of a trial that rolls into paid subscriptions. You’d probably even wouldn’t have had a problem with FREE trials, something other streaming services have. But since it’s Spotify now, even a paid trial is a horrible plan…
So, you’re guaranteeing me that there’s data backing this up, if only you could find it?
I bet 99 cents there is probably an instance of you citing the use of trials, free or otherwise, as a way to boost subscriptions to Spotify. And it probably wasn’t even said positively, it was probably used in a way showing what they were doing wrong.
So, you’re betting me money that there’s data backing this up, if only you could find it?
So, you’re saying you’ve never contradicted yourself or altered a viewpoint to better fit your narrative, ever?
I was merely asking for data to back your claims.
Yea, ok, sorry, I don’t feel like going through years of DMN comments.
So you’re right, you have never said anything contradictory ever. My bad.
Notice how Resnikoff never actually denies it?
“No, I never posted such a thing.”
” ‘Businesses’ with billion-plus valuations…” DMN/Paul seem to have this hangup or misunderstanding on the difference between market capitalization and cash flow. These capital valuations are like casino bets and they can go very bad, very fast. Consider MySpace, A little Google bird tells me that MySpace was sold to NewsCorp for $580 million in 2005; was valued at $12 billion in 2007; was sold off to an advertising firm for $35 million in 2011; now quite likely worthless.
NewsCorp lost 94% of the money they paid for MySpace. *poof* As I recall, MySpace’s last-ditch appeal to the public was trying to operate as a music-hub site.
And your point of this lesson is? I look at what you wrote, and see something that supports what I’m saying. These are high-stakes bets; sometimes they work out like Pandora, other times they don’t. But they aren’t in the business of slowly building profitability, instead, they are ramping up users and marketshare for an eventual liquidations event (multi-billion sale, IPO, etc.)
Spotify’s losses were way down this year, they are building profitability
Also, this particular promotion is aimed at getting people on board with premium subscriptions, not just growing the free user base
Also, what makes you think “slowly building towards profitability” is a better strategy for Spotify than spending freely to grow rapidly and keeping afloat with VC money?
Spotify’s losses were way down this year, they are building profitability
Well, that really depends on the accounting. There were some massive adjustments made this year for 2013, which revised the earlier accounting statements. So I take your point, but I can’t accurately assess whether losses were actually reduced. Let’s just say I’ve known a few too many CFOs in my time.
What’s your dislike of Spotify as a whole got to do with them putting their subscriptions on sale?
Its a stupid article any way you slice it
slippery???
its like mario cart and im like a salt truck in front but im not dumping salt im dumping banana peels…
No record store has ever placed records on sale to sell more records and get more repeat business, as that would devalue the product.
Great post, I just signed up!
Me too!
Hey Paul, wasn’t Taylor selling her album for 99 cent?
http://www.billboard.com/articles/columns/pop-shop/6296937/taylor-swift-1989-album-99-cents-microsoft-music-deals/
She used to have her music on emusic back when it was still nearly all-indie and heavily-discounted. Apparently that didn’t devalue her music. That or she didn’t think her music wasn’t worth much.
No, she wasn’t. Microsoft was. We don’t know how much Microsoft paid the record company, but the default assumption is that they paid the same as any other distributor, and sold it as a loss-leader.
Don’t forget Lady Gaga’s extremely discounted album on Amazon. I don’t think Billboard counted any of it.
The ads on free Spotify were so embarrassingly awful,it put me off the service entirely.That`s my aesthetic reason for dumping it.
nah..
its not a devaluation..
Netflix, Deezer, Google “insert stupid name here” , all will either give away the service for free or discount it in return to get those subscribers signed on..
if the service is good retainage (is that a real word?) of the people who stay on is usually pretty good..
depending on circumstances they can make that money back in 6 months..
its all about getting that credit card..
And with Taylor Swift having spotify’s name splashed all over the place its actually kinda genius.. (couldnt pay for that kinda viral marketing)
are they doubling down? sure
is it dangerous? sure
but I predict its their best bet right now.
“BREAKING NEWS! BREAKING NEWS!”
Must credit DMN!!!
Someone selling a subscription service on the Internet is offering a limited time free trial!!!
See discussion above.
The part where you and GGG played footsie for three turns?
No, thanks. It made my brain hurt.
SHORT-SIGHTED
This should have been the highlighted sentiment based upon reaction to the Spotify announcement.
Cmon, wise up people. As much as things have changed, they haven’t. The natural reaction to something like this is to whine and complain, then fight it. How about trying to figure out a different strategy and work with it to realize a new model? I didn’t think so.
Willis, unlimited streaming is a bankrupt business model. The music streaming companies can’t come close to replacing the amount of lost revenue for musicians and songwriters by eroding the paid market. Sure the labels have their part in it, but just talking about the indie’s with smaller audiences. It doesn’t scale.
Any chance to find a way to profitability for them was destroyed when these services offered unlimited free subs for years. They needed to have advertising / sponsorship as part of a paid service, if they were serious about profitability.
STREAMING IS THE DEVIL!!!! THANK GOD FOR HIPSTERS, LONG LIVE VINYL!!!!!!
Yikes! Artists will now get a (purported, if you believe Spotify) 70% share of $0.33/month – that’s $0.23 – per subscriber. I suspect the decimal places will cause most calculations to round the amount to $0.00.
Stop the pretense! Spotify = predator, creators & artists = food.
You misunderstood how their deals work. There will be a minimum payout per subscriber – there will be allowances for trial, but that will be established up front. artists (well, labels) will still receive their per-stream rate.
They will then take all the money away and give the artists their pittance.