Spotify launches new couples’ plan to make it easier to split a Spotify premium membership.
Dubbed Premium Duo, the new Spotify subscription, costs $12.99 a month. It allows two people who share an address also to share a Spotify plan. Spotify cracked down on ‘illegal’ family plan sharing last year by verifying addresses.
The new Spotify couples’ plan also creates a new Duo Mix playlist of both users’ music. The idea is to allow couples to share their music tastes to create a playlist for both. Duo Mix can be switched between chill and upbeat playlists. Family Plan memberships cost $2 more and add four more people (total of six accounts.)
Spotify’s new Premium Duo couples’ plan is an interesting strategy for subscription expansion.
On the surface, it appears tailored towards young people who may not have established a family yet. Spotify is likely hoping this will entice free users to upgrade to increase its recurring subscription revenue. Advertising budgets during COVID-19 have shrunk drastically, which may leave the Spotify’s ad-free tier less profitable than before.
Spotify’s most recent revenue report reveals ad-support revenues are falling short of its forecast. Spotify lowered its revenue guidance for the rest of the year because of that. In the past, Spotify tried offering free tie-ins like Hulu and a Google Home Mini to its Premium subscribers.
The Spotify Premium Duo plan is available in the US, UK, and more than 50 other countries. Existing Premium subscription subscribers can switch to Premium Duo by visiting their account page and changing their subscription. Upgrading to Premium Duo allows subscribers to keep their existing Premium accounts along with saved music and podcasts.
Spotify’s new strategy is to increase its subscribing customers as ad revenues fall amid COVID-19.
It may seem like Spotify is rolling out this new plan in response to COVID-19, but its been in testing since last year. Diversifying its subscription strategy could help net new paying subscribers, but Spotify runs the risk of being confusing. Presenting people with too many subscription options may cause indecisiveness.
I guess we’ll see how effective this strategy is for Spotify at its next earnings call. I expect many couples will take advantage of paying $2 less per month, but how many free users will upgrade? Spotify is hoping the net increase in subscribers will offset losing $2 a month from Family Plan downgrades. It will also be interesting to see if other music streaming services diversify their subscription offerings, too.