Spotify is slashing the cost of its advert-free music streaming in Europe, in a bid to win more paying customers besides just mobile users. It comes in two new tariffs Spotify’s introducing…
— Spotify Unlimited: £4.99pm/ for no-ads music, but no mobile access, no offline or MP3 play and no higher-bitrate quality.
— Spotify Open: Free, with ads, no invite required, but no mobile, no offline or MP3 play, no higher-quality and limited to 20 hours a month.
The £9.99 Spotify Premium package remains, giving mobile access and higher-fidelity music, while Spotify Free also remains but still requires an invite (Spotify is still struggling to manage bandwidth if it opens up to everyone entirely).
What does this mean… ?
Last year’s mobile apps, which require the £9.99pm subscription, gave a healthy boost to its subscription base. But it’s now surely acknowledging that this pricepoint is too high for folks at their desktop.
The new £4.99pm price is effectively a price cut for people who are likely the mainstream premium target base, and makes the pay-for offering lots more attractive.
At the last disclosed count, about 320,000 out of over seven million registered users were Spotify Premium customers – that’s about a four percent premium ratio, though the company disputes this.
This is the first time Spotify has introduced a multi-tiered pricing structure, and it will need to be mindful not to confuse potential customers. Its four-strong tier lineup now requires a grid so users can compare features. But, in doing so, Spotify has a more nuanced proposition than just two, blunt, pay-or-don’t-pay offerings, that are likely to appeal to more people.
The £0.99 day pass appears to have been killed off – perhaps there just weren’t enough people powering their parties with ad-free Spotify for a night.
Competition driving down price
Mog.com launched a pm All Access music streaming service in the U.S. in December and, after raising funds recently, is set to launch in the UK up against Spotify. Speaking about Spotify’s £9.99 pricepoint in January, CEO David Hyman told me: “We