There is sometimes a tense relationship between Spotify and music-rightsholders when it comes to the service’s aggressive Premium price promotions.
Record labels have become accustomed to seeing SPOT launch a deal, a couple of times a year, which tempts new subscribers to the service by offering them three months of Premium access for just $0.99. (A typical individual Spotify US subscription, of course, costs $9.99 a month.)
These and other ‘loss leader’ discounts from Spotify have definitely helped bump up the service’s subscriber numbers, but also inevitably reduced its global premium ARPU (Average Revenue Per User) – a number which fell by 30% between 2015 and 2018.
In addition, Spotify has been running a year-round, Netflix-style promotion that allows new Premium subscribers to test out the paid-for tier of the service for free, but only for a single month (30 days).
Now, in news that will delight consumers (and potentially concern certain record labels), Spotify is making a change to this 30-day free trial – by tripling it.
From today (August 22) new Spotify subscribers can enjoy a 90-day trial to the service’s Premium, ad-free tier for no cost whatsoever.
This is a potentially permanent move, says Spotify (“not limited time”, in its own words) – and will therefore become the company’s standard new-subscriber offer across the globe.
The deal gives Spotify listeners two months longer to experience Premium for free than they were able to before. It also rivals Apple Music’s subscription trial offering to consumers, which lays on three months of free music before users are required to pay.
Spotify’s three-month deal is only open to users who haven’t already tried Spotify Premium, and will roll out across all of the platform’s subscription types: a 90-day free trial to Individual and Student Spotify Premium subscriptions will start today (where available), with Family and Duo subscriptions becoming available in the coming months.
“We know it takes time to fully experience all of the features available with Premium, so we’re giving people the time that they need to fall in love with Premium’s seamless listening experience.”
Alex Norström, Spotify
Spotify Chief Premium Business Officer Alex Norström said: “Music and podcasts play an important role in people’s lives, so we wanted to give users the first 3 months for free to fully enjoy everything that Spotify Premium has to offer.
“We know it takes time to fully experience all of the features available with Premium, so we’re giving people the time that they need to fall in love with Premium’s seamless listening experience and on-demand access to more than 50 million tracks, billions of playlists and 450,000 podcast titles for free.”
Today’s news comes three days after Spotify announced improvements to its Family Plan, including new parental controls and the Family Mix, a regularly updated personalized playlist of songs for all six account users.
Added Norström: “This has been a huge week for Spotify Premium with two milestones – we’re rolling out an upgraded Family plan and we’re offering the first 3 months of Premium for free to customers that have not tried Premium before.
“These moments show our commitment to providing our Premium subscribers with the best experience and allowing more listeners around the world access to all that Premium has to offer. And there is more to come!”
At the close of Q2, Spotify counted 108m Premium subscribers worldwide (including free trials), amongst 232m total Monthly Active Users.
MBW understands that Spotify has secured global licensing deals with both Sony Music Entertainment and indie label agency Merlin for the coming year and beyond.
However, the firm is yet to renew its equivalent agreements with Universal Music Group and Warner Music Group, with whom, it’s understood, its existing two-year agreements (both inked in 2017) have now expired.
Last summer, Spotify raised its subscription prices in Norway by 10%. MBW research posted this week shows that, market-wide, the move had no negative subsequent effect on Norway’s subscription streaming revenues.Music Business Worldwide