20 May 2010

Spotify cuts prices as streaming services multiply

Spotify is halving the cost of its ad-free music streaming service (in Europe) from £9.99 a month to £4.99.   This is a naked bid to woo more customers.  Mobile users have been kind to Spotify, but the numbers just don't stack up - 320,000  premium customers from over 7 million resistered users (just 4%).

The new Spotify tariffs:

Spotify Unlimited: £4.99 per month for ad-free music with no mobile access, offline, MP3 play or high-bitrate streams

Spotify Open: Ad-free, with no invite, mobile, offline, MP3 play or higher-quality streaming and limited to 20 hours a month

The £9.99 Spotify Premium package remains in place for higher-fidelity mobile access

Spotify Free also remains but still requires an invite

The new price (4.99 a month) is aimed at mainsteam target consumers, people who are the larger part of Spotify's seven million plus registered users and whose primary need is for desktop streaming.

In March, We7 showed the way for Spotify when it revealed a premium model at £4.99 per month for unlimited web-based play with the £9.99 per month model enabling addtional mobile access.

Napster too recently relaunched as a lower-priced, £5 per month streaming service, with five free MP3s each month.

Mog.com launched a per month All Access streaming service in the U.S.A in December and is soon set to launch in the UK.

£5 seems to be the magic number that consumers may sustain.   Which streaming service will survive?

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