In the Subscriptions Game, Student Plans are More than Back-to-School Bargains

Amazon Music, Spotify, Apple Music and a long list of other music streaming services are leaning more heavily into bargain student plans to grow subscriber revenue.

This week, Amazon announced a back-to-school bargain on its Music Unlimited plan for Prime Student subscribers. Members get access to the music streaming service for an extra 99 cents per month.

Students who don’t have a Prime Student plan can opt for a six-month trial, and then add the Music Unlimited subscription at the cut-rate price.

Music Unlimited typically costs $7.99 per month for Prime subscribers and $9.99 per month for those without Prime. A Prime Student membership is half the price of a regular Prime subscription at $6.49 per month. Adding the Music Unlimited plan on top would run $7.48/month. 

Google, meanwhile, is running its latest back-to-school deal for students with a free three-month trial of YouTube Music Premium or YouTube Premium.

Students signing up for the discounted plan get a choice of $4.99 per month for YouTube Music Premium, or $6.99 per month for YouTube Premium. Instead of getting one month free, for a limited time, they now get three months. When the time expires, Google starts charging its regular monthly price.

Table: Music Streaming Student Plans

Amazon Music$.99/monthAdd to existing Prime membership
Apple Music$4.99/monthThree month free trial
Deezer$4.99/month30 day free trial
Pandora$4.99/month60 day free trial
SoundCloud$4.99/month30 day free trial of SoundCloud Go+
Spotify$4.99/monthIncludes Hulu and Showtime
Tidal$4.99/monthFor standard sound quality
YouTube Music$4.99/monthThree month free trial

Lack of Student Marketing Bites Spotify on Earnings

Music services know that millennials listen to far more music on a daily basis than Baby Boomers do. Student plans are designed to capture them early as first-time customers, offer them an incentive to switch services, and convert them to premium paid levels.

In its quarterly earnings report issued last week, Spotify’s growth in monthly active users beat the best-case prediction it made in April, but subscription growth was disappointing. Its 108 million figure scraped into its guidance range of 107 million to 110 million.  

“We missed on subs. That’s on us,” said Daniel Ek, Spotify’s CEO. He explained that the shortfall was rooted in “execution,” citing a failure to more aggressively market its student plan.

“The problem with the execution was we didn’t tell anybody about it, so it was only if you stumbled upon it randomly by chance,” Chief Financial Officer Barry McCarthy said on Spotify’s earnings call.

McCarthy said it is a “relatively easy fix” given that Spotify didn’t market the service “at all” in its latest quarter.

Though Spotify is the biggest streaming service by both listeners and subscribers, Apple has reportedly overtaken Spotify for subscribers in the U.S., the world’s biggest market for recorded music. Apple Music has benefited from the popularity of the iPhone to recruit new members.

What to Know: Back-to-college Spending

  • According to the National Retail Federation, U.S. families with college students are expected to spend $976.78, up from last year’s $942.17, on back-to-college goods
  • The average planned spending per household for back-to-college shoppers is $696.70, the highest ever recorded by the NRF
  • In planned purchases, families with college students will spend their money primarily on school supplies, clothing and personal care, and secondarily on electronics, furnishings and gift cards.

Published by: Charles Ederer

Charles is Streaming Week's editor and publisher. A former Silicon Valley marketing executive, he writes about the intersection of business strategy and music-streaming innovation.

Categories Featured, Marketing