Spotify Dramatically Expands Its Free Trial Period to 90 Days — There Goes the ARPU

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Spotify has announced that it is increasing its free trial period from 30 days to 90 days for new users. Starting today, eligible users can enjoy three months of the service for free when they sign up for Spotify Premium. This move appears to be an attempt by Spotify to match Apple Music’s generous three-month free trial.

The new free trial offering launches today for individual and student plans. The company has said that it plans to extend the trial to duo and family plans in the next few months. However, it’s important to note that this offer is only available to new Spotify users who have never signed up for Premium before.

By extending the free trial period, Spotify may be able to retain users for a longer period of time. However, the decision raises questions over whether Spotify’s average revenue per user (ARPU) will now erode further.

In Q2 2019, Spotify reported an ARPU of $5.40, which was only a slight improvement over its Q1 $5.25 ARPU. By extending the free trial by three months, Spotify may see that razor-thin margin drop into a loss in the coming months.

Spotify estimated that 75% of the impact on its average revenue per user could be attributed to product mix changes. However, the attempt to match Apple Music does set Spotify ahead of the rest of the streaming pack. Tidal, Amazon Music Unlimited, YouTube Music, and Deezer all only offer 30-day free trials.

Spotify has teamed up with hardware partners in the past to help widen its growth potential. The streaming giant currently offers four months of free premium streaming to Galaxy S10, Galaxy Tab S5e, and Galaxy Note 10 owners.

With Spotify shifting to 90 days, Apple Music will now face pressure to keep its lengthy trial offer intact. Some users were reporting seeing only one-month free trials offered by Apple Music last month, with Apple interested in shifting users into paid accounts. However, Apple has not made any official comment on whether its trial period would be changing.

Overall, it’s clear that Spotify is trying to position itself as the leader in the music streaming industry. By offering a longer free trial period, it’s hoping to attract new users and keep them loyal to the platform. Whether this move will pay off in the long run remains to be seen, but it’s certainly an interesting development in the streaming wars.

It’s worth noting that Spotify has been facing increasing competition in recent years. Apple Music has been steadily gaining ground, and other services like Tidal and Amazon Music Unlimited have been making waves as well. Spotify’s move to offer a longer free trial period could be seen as a way to differentiate itself from these other services and position itself as the top choice for music lovers.

However, there are also risks involved in this strategy. By offering a longer free trial, Spotify is essentially giving away its product for a longer period of time. This means that it will take longer for users to start paying for the service, and it could also make it harder for Spotify to generate revenue from advertising.

It’s also worth noting that Spotify’s decision to extend its free trial period could have wider implications for the music industry as a whole. With more users signing up for free trials and fewer people paying for music, artists and record labels could see their revenues decline even further. This could have significant implications for the future of the music industry, and it will be interesting to see how things play out in the coming months and years.

Overall, it’s clear that Spotify is making a bold move with its extended free trial period. Whether this move will pay off in the long run remains to be seen, but it’s certainly an interesting development in the music streaming wars. As users, we can sit back and enjoy the benefits of this competition, as we are likely to see even more generous deals and offers from these services in the future.