Streaming services are embracing cheaper subscription plans in a bid to turn free users into paying customers. Following news of a YouTube Premium Lite offering yesterday, Spotify is the latest streamer to confirm a cheaper tier. The world's biggest music streaming service is testing a $0.99 monthly plan that retains the ads but gives you infinite skips per hour and lets you select specific songs on an album or playlist for playback. Spotify, which confirmed the test to The Verge, is hoping it can convince you to put up with ads in return for more control over the listening experience. In other words, it wants to have its cake and eat it, too.
Currently, free users can only skip six tracks per hour and have to listen to shuffled songs on albums and playlists. That's a bummer if you're sick of hearing Justin Bieber or just want to put that one new Billie Eillish track on repeat. Despite those incentives, getting people to pay for an ad-supported service, even if it is just $0.99 per month, is still a big ask. Especially when they're accustomed to getting it for free. Then again, video streamers like Hulu and HBO Max have either successfully done it or are trying to do it.
The risk is that it could eat into Spotify's existing premium user base, which make up 165 million of its 365 million subscribers. Turning those remaining 200 million users into paying members is clearly the goal here. It could be that the low $0.99 price helps to ease that transition. We'll know if the gamble has paid off if Spotify expands the plan to more users. In the past, the company has done just that with new plans, including its $12.99/month Duo tier aimed at discouraging password sharing and its upcoming Lossless "HiFi" offering.
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