FREE Spotify Premium– Get it Now! Legal Case #5: Email Marketing

A free what!? (The offer)

Spotify launched an amazing offer in early November where users are able to download a free 60 day trial of Spotify Premium. Recently, that offer has been reduced to a free 30 day trial of Premium, but I still say that’s better than no trial at all! Spotify has 3 different levels of their radio available: Free, Unlimited and Premium. Every user starts with the Free version which means instant, free music with advertisements (played in between songs) to your laptop or desktop. You can create playlists and star music that you like and that you want to hear again (but only from a laptop or desktop) You cannot access your playlists or starred music on a mobile device. With mobile, the free app allows you to play Spotify radio (which is where you don’t choose specific songs to hear–it becomes more like Pandora.) A user may upgrade to Spotify’s Unlimited version which costs $4.99/month and is the same thing as the free version but without advertisements. And then there’s Spotify’s Premium version which costs $9.99/month and you can listen to all your playlists, starred music lists on all your devices, there are no advertisements. For both Unlimited and Premium, you can decide to end your upgrade whenever you like, there’s no commitment which is pretty nice and considerate of Spotify.

How do you get this awesome deal? (content of the e-mail)

I got an e-mail from Spotify radio in late October that was titled “Redeem your free 60 days of Premium now!” Spotify then personalized their message/ad by addressing me directly, reading “Hi Monica, can we tempt you back with 2 free months of Premium? This is our best offer ever and it’s on for a limited time…you’ll need to redeem by Sunday, November 3rd.” Then it went on to list all the benefits I would get by upgrading. This offer is available for any and all who use or simply know about Spotfiy but this offer was exclusively advertised to Spotfiy users who are already on Spotify’s e-mail list serve (to get on their list serve, you simply create a Spotfiy account.)

Why launch this awesome deal? (Spotfiy’s target audience & effectiveness of offer/strategy)

This offer most likely done for measurability, to increase revenue, to have and keep Spotify users in the know of the latest news and to actually get their trial used by already established users. I think this offer was a great promotion for Spotify to do as they do have competitors (Pandora, 8tracks… etc) who are not offering free trial upgrades at the moment. This offer was not only targeting their current users but also targeting more/new users who may not know the exact differences between Spotify and their competitors.  When curious, potential users visit spotify.com, scroll down, they are able to see the 3 different levels of Spotify radio and how there is a promotion for a free trial of Premium. If anything, this offer is effect as it definitely acts as an incentive for unsure radio deciders to go with Spotify.  Spotify will also most likely accomplish one of their goals of generating more revenue. The users that do upgrade their accounts with the free trial of Premium have to keep in mind that once their 30 (or 60) free days are up, they are responsible for canceling their Premium upgrades or else they will be billed $9.99 per month until they do so. And Spotify has to know that there will always be those users who aren’t good at keeping track of their free days.

Spot on with Spotify: Legal Case #4 Pricing Strategies

Spotify’s current tagline is “Soundtrack your Life” which is exactly what Spotify allows their users to do. Spotify lets users pick and choose which songs they want to listen to, users can create playlists that play specific songs and most importantly, Spotify gives you the ability and access to discover new music.  With a focus on streaming music depending on what you’re in the mood for, Spotify’s service is completely free (which is the best part in my opinion.)  You may ask, since Spotify is a company that provides it’s music service for no charge, how in the world do they make revenue?  The answer: it relies on Freemium & Advertising; (Anderson’s taxonomy) Freemium is which is when free services, like Spotify, make revenue by offering upgraded versions of their service. Spotify has two different upgraded versions: Unlimited and Premium.  So with the free version, you have ads and can’t access your Spotify playlists and collections from any device. The Unlimited version costs $4.99/month where you basically pay for a free account without advertisements.  And the Premium version is $9.99/month where you can access your whole account from any device you use and there are no advertisements.  Spotify is able to maintain their services to be offered for free because they heavily rely on advertisements.  Every free user has to listen to an advertisement before they can continue listening to their music.

I find that Spotify’s strategy of being a Freemium site and using advertising to make revenue is a very smart and good idea that is a success.  It’s strategy is effective because users are definitely attracted to the fact that this music service site is free and they’ll be more likely to listen or at least hear an advertisement in order to get back to their music. Users, advertisers and Spotify all end up happy.  Spotify is only more attractive to users because it’s so accessible (they are able to play on any device) and they make it so easy to find new music.  The best part about Spotify is that they don’t overdo their ads. As some of their competition does, Pandora comes to mind. Spotify plays about 15-30 second ads while Pandora will play almost a whole minute of ads.  Spotify does have competition (as any successful company should, in my opinion) Pandora and 8tracks are the two I came up with.  Both are similiar to Spotify as they both rely on being a Freemium service and the use of advertising.  8 tracks attracts different kinds of users as 8tracks focuses specifically on what genre of music you’re in the mood for and actually allow users to upload and share their own mixes and music. Pandora focuses on listening to an artist, song or genre you’re in the mood for and they’ll match you with similar artists, songs or genres to the one you originally wanted. All three apps attract different users but essentially, they are all the same services and are all very successful.