Spotify cuts Premium rate in half for college students

Steven Loeb · March 25, 2014 · Short URL: https://vator.tv/n/35df

With so much competition, Spotify wants to hook in users while they are young

Remember Joe Camel? He was the cartoon mascot of Camel cigarettes, who was forced into retirement back in 90s after critics accused Camel of trying to hook in children with their cartoon mascot. They said that the company was going for a  "get em while they're young" type of deal, something that the company, of course, denied. 

To be honest, as sleazy and wrong as it was to do this, it did make good business sense. Getting people while they are young and impressionable gives a company a good chance of keeping them as customers in the long run. 

So is anyone really surprised that tech companies now seem to be taking a similar approach? With so much competition, companies need to get users as young as possible. It's the reason that Facebook is freaking out so much over it's "teen problem."

There is no more competitive space right now, though, than music streaming. So, in a move designed to collect a bunch of new, young users and keep them, hopefully forever, Spotify has decided to cut the price of its Premium service in half for college students.

Users who sign up for Spotify's Premium service not only get ad-free listening, but higher quality audio and the ability to get on-demand access to any song via mobile. For non-Premium users, they only get a Pandora-like radio service when on the go.

Rather than paying $10 a month for these features, as everyone else has to, students who are currently enrolled in  accredited U.S. universities will only have to pay $5. Any student who is already a Premium member cannot get a discount for the current month, but they can register for the discount so that it will be applied on the next renewal date of their current subscription.

Spotify is using verification service SheerID to make sure that people who try to get the discount are actually enrolled in a college, and not attempting to take advantage of a discount they don't qualify for.

This is not the first time that Spotify has offered a similar deal to student: it introduced a similar discount to U.K. students in 2012.

While Spotify is one of the biggest companies in the music streaming space, it has a lot of catching up to if it wants to truly compete with Pandora. Spotify currently has over 24 million active users, but only a quarter, six million, are paying subscribers. Pandora, on the other hand, has more than 250 million registered users.

Spotify has to be hoping it can close that gap, at least a little bit, with this latest move.

There are nearly 17.5 million currently enrolled students in the United States. Even if only a quarter of those students sign up, it would net Spotify an extra $22 million in revenue and give them over four million new users. 

Since its launch in 2008, Spotify says it’s driven more than $1 billion to rights holders. it currently has over 20 million songs, with over 20,000 being added every day. It is available in 55 markets, including Austria, Iceland, Belgium, Bolivia, Malta, Portugal, Slovakia, Argentina, Nicaragua, Australia, Malaysia and Taiwan.

In November of last year, Spotify raised $250 million in new funding at a $4 billion valuation. That brought the company's total funding to $538 million. 

(Image source: blog.ck12.org)

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Pandora, the leading internet radio service, gives people music they love
anytime, anywhere, through a wide variety of connected devices: laptop and
desktop computers, smartphones, connected BluRay players, connected TVs,
etc. Personalized stations launch instantly with the input of a single “seed” –
a favorite artist, song or genre. The Music Genome Project®, a deeply
detailed, hand-built musical taxonomy, powers the personalization or
Pandora. Using this musicological “DNA” and constant listener feedback
Pandora crafts personalized stations from the more than 800,000 songs that
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More than 75 million people throughout the United States listen to
personalized radio stations for free on Pandora through their PCs, mobile
phones and devices such as the iPad, and connected in-house devices
ranging from TVs to set-top boxes to Blu-Ray players. Mobile technology has
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with the introduction of the Apple app store for the iPhone in the summer of
2008. Pandora instantly became one of the most top downloaded apps and
today, according to Nielsen, is one of the top five most popular apps across
all smartphone platforms.


Pandora is free, simple and, thanks to connectivity, available everywhere
consumers are – at the office, at home, in the car and all points in between.
In 2009 the Company announced that Pandora would be incorporated into
the dashboard in Ford cars via SYNC technology; GM has already followed in
announcing plans to integrate Pandora into its vehicles and Mercedes-Benz
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stereo controls. This was all great news for the millions of Pandora listeners
who had been plugging their smartphones into car dashboards to listen to
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happens in the car, making it a crucial arena for Pandora.


Today tens of millions of people have a deeply personal connection with
Pandora based on the delight of personalized radio listening and discovery.
These highly engaged listeners reinforce the value Pandora provides to: 1)
musicians, who have found in Pandora a level playing field on which their
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Pandora continues to focus on its business in the United States. The radio
arena has never been hotter, thanks to technology that enables radio to be
personalized to the individual and more accessible than ever before. Right
now millions of people listen to Pandora in the United States and we hope
someday to bring Pandora to billions of people around the world.

Timeline:
• 2000 – Tim Westergren’s Music Genome Project begins.
• 2005 – Pandora launches on the web.
• 2008 – Pandora app becomes one of the most consistently downloaded
apps in the Apple store.
• 2009 – Ford announces Pandora will be incorporated into car
dashboard. Alpine and Pioneer begin selling aftermarket radios that
connect to consumers’ iPhones and puts the control and command of
Pandora into the car dashboard.
• 2010 – Pandora is present on more than 200 connected consumer
electronics devices ranging from smartphones to TVs to set-top boxes
to Blu-ray players and is able to stream visual, audio, and interactive
advertising to computers, smartphones, iPads, and in-home connected
devices.