The median willingness to pay for multiple users is $4 above the current price point. This makes the Family Plan an absolute steal. The Spotify Family Plan allows five users to access a single account for $14.99. The price for the Spotify Premium Plan is $9.99/month. But two features offer potential segmentation possibilities for pricing plans: The features that are already included in the premium package-offline listening, ad-free listening, skipping, and the library-are all about the correct price point. Their lack of feature differentiation is what is costing them money:

Spotify is losing money on their Family Planīut this doesn't absolve them of their other pricing misdemeanors. We have to take some of the blame for Spotify's low pricing. It is these 26- to 45-year-olds who have forced Spotify to pull down their pricing. Older generations grew up with music clubs and vinyl records, so they are willing to pay for music. Younger generations have grown up with Spotify et al., so they are willing to pay for music. The only one in the history of existence. Basically, we have this hole in our generation where we are the only generation unwilling to pay for music. We grew up with Napster, Kazaa, LimeWire. The data show that it is those out of college and in the early parts of their careers who have a lower willingness to pay. By getting customers when they're young and then activating them on the service, they'll be less likely to churn and move to Apple, Tidal, or Prime when they graduate and the price gets bumped up. Spotify knows that people will probably sign up for only one music-streaming service. Again, this is a pure acquisition and retention strategy. Most students are under 25, yet these customers are willing to pay double their current pricing. That is a great price for access to more than 30 million songs.īut this demographic has a higher willingness to pay than their immediate elders: Students can get Spotify (and Hulu) for $4.99/month. The data show that the Student Plan is missing its mark. The Family Plan, which allows up to five users to share an accountĪ Student Plan, for anyone enrolled at a U.S. Aside from the main $9.99/month Premium Plan, Spotify has two other payment plans: But Spotify seems to be doing that almost completely wrong. This is a surefire sign that the pricing is ripe for differentiation. Some people only want to pay $5 for music, others $15. There are a lot of people pulling down this particular range, and there are a lot of people pulling this up.

What's weird about this is that this range is much, much wider than what we typically see for a product.

Spotify family plan college student