Photo Credit: Felipe Pelaquim
Is a slow down ahead? Spotify is re-introducing its three-month free trial for new subscribers.
Only new subscribers are eligible for the offer, which gives three months free of the $9.99/month Individual plan. Who is considered a ‘new’ subscriber under Spotify’s terms? Those who have never had a Spotify account and anyone who canceled their Spotify account before July 15 are eligible for the promotional terms.
Spotify says users in 135 markets, including the United States, have access to the three-month free trial offer.
The promotional offer is available through September 11. That means Spotify is looking at retaining new subscribers who take advantage of this offer at least through the end of 2022. Spotify’s quarterly financials in 2022 reveal subscriber growth is slowing. Spotify added just two million new premium users in Q1 2022. Compare that to Q1 2021, when Spotify added eight million new subscribers in the same period.
Spotify says the exit from Russia resulted in 1.5 million subscriber churn during the period. But subscriber growth continues thanks to Latin America and Europe. MIDiA Research suggests that Spotify may be subject to the ‘attention recession’ where subscribers are overwhelmed with entertainment options.
Spotify expects to add around 17 million new monthly active users in Q3 2022, fueled by this free trial. If Spotify manages to hit those numbers, it will have nearly 450 million monthly active users. Spotify says it expects Premium subscribers to be near 194 million in Q3 2022. The extended free trial aims to meet those goals for Spotify, who is predicting around three billion euros in revenue thanks to its expanded focus on podcasting.
“We continue to monitor the global macro outlook, but to date, have seen no real impact on our user or subscriber outlook,” Spotify’s Chief Financial Officer Paul Vogel said on a call to investors during the Q2 2022 financial report. “Specifically, we expect to see another quarter of accelerating MAU net adds and expect subscriber net additions similar to Q3 2021.”