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Spotify’s ‘Duo’ tariff gives a whiff of what’s to come

Sharing accounts might be the norm in the world of content streaming platforms, but Spotify’s new ‘Duo’ tariff might be a sign of changing attitudes.

In many homes throughout the world, streaming platforms are shared. This is a truth which is generally accepted as the norm, but it does technically violate the terms and conditions of the service and does impact the experience for the user. For example, if users are sharing a premium Spotify account, it can only be used on one device at any point.

Duo seemingly addresses this point and does so at a price point which is a lot more palatable. For €12.49 a month, users can link two accounts to the same bill, offering two ‘tailored’ experiences but with a bundling discount and a single point of payment.

Spotify has already experienced some joy with the idea of bundling having launched the family plan. Here, six profiles can be linked into the same bill for €14.99 a month. Increasing premium subscriptions being reported during earnings calls suggest this is perhaps having a positive impact on the business.

Spotify

Netflix is another streaming platform where users may be taking advantage of how easy it is to connect and share passwords. Although Netflix does allow up to five profiles on a single account, there is little preventing these profiles from being shared outside the home. Netflix has not seemingly made a massive fuss of this so far, though we suspect this was not the desired outcome.

Ultimately these are commercial entities seeking profit. The perfect scenario for these organizations will be for every user having their own subscription, though the practice of password sharing contradicts this; why would you spend £9.99 a month when you can simply log into Mum and Dad’s account?

While there is still room for subscription growth, this is not necessarily a massive issue for the OTTs, but there will come a day where they will have to start thinking about how to tackle the issue. Considering how quickly the world is adopting the new content status quo of entertainment on demand, it won’t be too long before that glass ceiling is hit.

Spotify’s approach is an excellent way to tackle the issue of password sharing. At €12.49, Spotify will not be hording in a tsunami of profits, but it will be gaining more revenue in effectively the same position. There are two users sharing an account, paying a single bill; the platform is being used by two people. With Duo, both users are still using the service, but Spotify is collecting more revenue. It’s as close as you can get to free money.

How the other OTTs plan on tackling this issue remains to be seen, though we suspect they almost certainly will. Content is becoming an increasingly expensive habit to fuel, and at some point the companies will have to be true to their terms and conditions.

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One comment

  1. Avatar Telcoguy 01/04/2019 @ 4:21 pm

    Considering Spotify loses something like $0.30 every time a track is played, they need to come up with every possible avenue to generate income! I suspect they will be the most aggressive to target account sharing for this very reason: the long-term outcome is people playing more (costing them more) so they need to look at all solutions. For Netflix, it’s more early days: if Netflix becomes the defacto source of all tv content, it’s an acceptable risk to them: especially as they own so much of the tv content – all valuable IP that has no licensing costs. Become the dominant player, then they can consider whether shareholders want more return.

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