Can Sprint Help Spotify Dominate Music Streaming?
Sprint (NYSE:S) is reportedly looking to team up with popular music streaming service Spotify by offering a Spotify subscription at a discount along with the purchase of a Framily Plan through the wireless carrier, according to sources who spoke to Inferse. Those sources said that Spotify would offer a free trial of its premium service to Sprint Framily Plan subscribers and then give heavy discounts on a premium subscription when the trial period expires.
Spotify offers a free, ad-supported service and a premium, ad-free service for $9.99 per month. As the online music streaming market becomes increasingly competitive, Spotify is trying to convince more people to pay for its premium service.
Inferse said that Sprint will likely unveil the option at a media event on April 29 in New York City. The collaboration would be in competition with AT&T’s (NYSE:T) recent deal with Beats Music. That deal gives AT&T customers access to the streaming service for $9.99 per month or gives the option to share a subscription with up to five people for $15 per month.
The rumored deal between Spotify and Sprint would be a more competitive option than the one offered by AT&T and Beats. Spotify has been reducing fees and increasing options lately in an attempt to make itself the top music streaming service. The company recently did away with a cap on free monthly music listening to offer unlimited streaming for free.
The online music streaming market is only getting more crowded, as the ability to stream from a huge catalog using an app is cutting down on digital music downloading. Apple (NASDAQ:AAPL) released the competing service iTunes Radio in the fall, and Amazon (NASDAQ:AMZN) has been rumored to be planning its own entry into the market. Spotify wants to become the best music streaming option and the go-to service for consumers.
The latest data from Electronista shows that Pandora (NYSE:P) remains the most popular online music streaming service. Clear Channel’s (NYSE:CCO) iHeartRadio is in second place, with a 9 percent share of the market. ITunes Radio is quickly moving up the ladder, gaining an 8 percent of the market only six months after launching. Spotify is in fourth place, with a 6 percent share.
Inferse reports that the deal could still be derailed if the record companies that license their music to Spotify don’t agree to it, but given the chance to grow the service’s subscriber base and gain record companies more fees, they are likely to approve the partnership.
Spotify is rumored to be preparing itself for an initial public offering sometime in the next year. The latest rumors suggest that Spotify is in the process of raising a credit facility, and it recently hired a U.S. financial reporting specialist, both of which have fueled speculation about an IPO for the company.
More From Wall St. Cheat Sheet:
- Is Spotify Setting the Stage for an IPO?
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- iTunes Radio Now More Popular Than Spotify and Gaining on iHeartRadio
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