Spotify appears to be feeling the heat from the impending launch of Apple Music. While it currently offers U.S. consumers a trial of three months for $0.99, most other countries are offered only a one month free trial – which it has just doubled to two months in a bunch of other countries.
It was confirmed this morning that Apple would be taking the same approach as Spotify in effectively paying labels a 35% royalty – half the going rate – during its own three-month free trial.
I recently outlined my reasons for believing Spotify will really feel the pressure from Apple Music, while Chance Miller believes Beats 1 is the killer feature.
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Spotify was already in trouble, due to the fact that music streaming stinks. There is little to no money in it. The fact that they are not matching the full 90 days tells you how tough things will get for spotify going forward. The big blow for spotify and certainly where Apple will caused the most damage is the family plan. That’s a lot of revenue spotify will have to give up to match Apple (about 60%). Can spotify afford that kind of a loss, and for how long can they keep it up. I suspect Apple wanted a lower entry price point, which the labels rightfully said no to, which forced Apple to look to differentiate on the family plan and they went very aggressive pricewise. Right now, unless someone buy them, spotify will be losing a lot of money.
2 months instead of 3 and 99 cents instead of free is not “hitting back” anything.
It is when after 3 months you have to pony up 10 bucks a month for Apple while Spotify will gladly let you continue to enjoy their service for free with Ads forever.
Forever being as long as Spotify can maintain their current business model without going bankrupt.
You can say that about any business
Ads, no offline support, and others stuffs blocked… Yeah, “enjoy” their service…
Yes those are vital features for the hundred million teens who cant pay 9 bucks a month, good point!
Run Spotify Runnnnnn!
Yawn… let me know when Spotify gets close to matching the # of users for $15… that is what is going to make me stay with Spotify or go with the new Apple service