Spotify runs $99 annual subscription promo to challenge Apple Music
Spotify on Friday launched a promotion offering 12 months of Premium streaming for $99 -- a little over $20 less than the music service would normally cost going month-to-month.
The sale expires on Dec. 31, and is available only to people starting or extending an individual plan. It also can't be paid for through gift cards or prepaid cards, which limits its potential as a holiday present.
It may nevertheless prove a competitive weapon against services like Pandora and Apple Music. The latter has been offering $99 annual subscriptions since last year, though only by diving into subscription settings or buying a gift card.
Typically an Apple Music subscription costs $9.99 per month -- the same as Spotify's monthly fee.
Spotify is also currently selling three months of Premium for $9.99, though not to anyone who canceled a subscription after Oct. 20. Premium users get ad-free listening, offline caching, and access to higher-quality streams.
The sale expires on Dec. 31, and is available only to people starting or extending an individual plan. It also can't be paid for through gift cards or prepaid cards, which limits its potential as a holiday present.
It may nevertheless prove a competitive weapon against services like Pandora and Apple Music. The latter has been offering $99 annual subscriptions since last year, though only by diving into subscription settings or buying a gift card.
Typically an Apple Music subscription costs $9.99 per month -- the same as Spotify's monthly fee.
Spotify is also currently selling three months of Premium for $9.99, though not to anyone who canceled a subscription after Oct. 20. Premium users get ad-free listening, offline caching, and access to higher-quality streams.
Comments
I’m curious how long Amazon can continue losing so much money as well. I know, they occasionally make a profit, but how long can they offer Prime with “free” 2-day shipping, plus music, plus movies, plus whatever else you get with Prime. If Apple truly operates iTMS at break even or slightly better then Amazon must be losing more and more money every time they add more to Prime. I don’t get it. A couple of years ago I saw a guy on YouTube talking about how the prior year (I think) Amazon had spent $6 billion on shipping costs but only charged customers $3 billion. Like Spotify, I just don’t see how this is sustainable.
Edit: Never mind, already said.
or get left behind.
”AWS remains the profit engine for Amazon, which has always operated on thin e-commerce margins. While AWS accounted for 10 percent of Amazon's total revenue in the quarter, the unit generated operating income of $1.17 billion, while the company as a whole had operating profit of just $347 million.” - From CNBC
But that’s what I mean. If most of their income is from AWS when does it stop making sense to be operating everything else at a loss or barely above break even? Why add more “free” stuff to Prime when that isn’t where their money comes from? And AWS is certainly a much different business than selling to consumers. I imagine there aren’t many Amazon customers who are even aware of AWS, let alone put money toward it (directly). By that I mean, if Amazon decided to close it’s retail doors and just keep AWS going would that even have any effect on AWS? I doubt it. It’s something like a conglomerate. If one company that makes pens in one division and saw blades in another and window coverings in another, completely exits the market for one division it would have little effect on the others. So if one of those is losing so much money that it’s dragging the rest down why keep it?
And, as has already been mentioned, how can Spotify last when they’re competing against companies that don’t need to show a profit in streaming? I don’t use Spotify so I can’t answer this, but, is Spotify’s service/app/interface/everything so much better than the other competitors that they could keep their users (or enough users) to raise their prices to a point where they actually earn money?
They are in deep financial trouble.
Back to Spotify. I sure don't see how Spotify can cut prices because it only has that one business, unlike Amazon with multiple businesses. At least Spotify is only offering a price cut for a short time to try to attract more subscribers. I hope it works out for them. Maybe they intend to raise prices down the road. Streaming content businesses are never very profitable, if at all. Apple could crush a lot of streaming businesses if it really wanted to. Apple's got billions of dollars they can afford to lose. However, even as an Apple shareholder, I don't want to see Apple trying to drive other companies out of business just on a whim. I'm not that greedy. I definitely want Spotify to survive and I'm sure Apple isn't concerned about Spotify ruining their streaming business.
Don't try to figure out why big investors prefer certain stocks over others. They probably see some bigger picture due to insatiable greed. The FANG stocks all have huge market share percentage, so they're seen as far more valuable than Apple. That's just the way it is. If Apple uses its repatriated overseas cash to full advantage, Apple could blow any of the FANG stocks away. Apple won't do that. They'll stay conservative to the very end and Amazon will eventually overtake Apple in value. Now that Jeff Bezos has the taste of unimaginable wealth, there will be no stopping him from becoming the wealthiest man on the planet. Wall Street will back him all the way.
Now with Spotify; I can only imagine that they are making some sort of profit by re-negotiating the royalties that they are paying the musicians on the backside. Or they are writing off the discount as a marketing charge.
I don't see how Spotify can continue in the long term. I think eventually someone will buy them out. The writing is on the wall. I use Spotify and like it a lot. The apps are great and I prefer it over Apple Music. I really like the artist playlists feature on Spotify. Apple Music has nothing like that as far as I'm aware. Another reason why I prefer Spotify is Apple Music match is a disaster. Both trials of Apple Music for me destroyed my iTunes library.
"Free" prime shipping isn't. It's discounted, and you can tell by shopping the same item without Prime. It costs $2 more or so per item but then "free" 2 day shipping. It's a gimmick but I use it often. As for Music, free prime music doesn't have a lot of newer content. You have to pay for the Apple Music equivalent even if you are Prime.
Interesting aside: I was looking for a small metal sign a couple of months ago. I found the same item on Amazon and Walmart, both websites listed the same supplier of that item. I don’t remember exactly but one of them had a lower cost on the item and the other had a lower shipping rate but when the cost and the shipping were added together the item cost the same on both Amazon and Walmart.