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 new monthly plan at a variety of price points that retains the ads, but gives you infinite skips and lets you select specific songs on an album or playlist for playback. At least one user told The Verge that they had spotted the new Spotify Plus tier being advertised at $0.99.
It is understood that Spotify is offering select users the plan at different price points during the test, with the ability to opt-in or choose another plan.
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 Eilish 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.
Update (8/3): This article has been updated to reflect that Spotify Plus is being offered at a variety of price points as part of the test.