Can a new strategy make online subscriptions more appealing? Well, that’s what two companies are trying to create by offering a new type of digital subscription.
In early February, The Times of London (owned by News UK) and music streaming giant Spotify formed a partnership that gives subscribers the option to combine music and news for a weekly price. In order to receive the music subscription, potential customers need to purchase a premium subscription to the Times. After buying the subscription, the customer would have the chance to add the Spotify-Premium to their news subscription.
Subscribers would pay around £6 or $10 per-week for the news and music subscription. The premium subscription only gives subscribers access to Spoitfy Premium for one year. After the one-year period, the subscriber then pays an additional fee if they want to keep the subscription. Customers still have to option to only subscribe to the online news platform and not add the Spotify membership.
What is new about this partnership is that The Times of London, a traditional newspaper, is teaming up with Spotify a company that offers completely different content. This would be similar if iTunes teamed up with The New York Times to offer new content.
The new deal is unprecedented. According to Spotify this is the first major partnership with another media company. However, the European music company does have partnerships with media related websites. For instance, Spotify also allows subscribers to sign up for its services by using Facebook.
The new type of bundle is an effort to improve News UK’s paywall offering. The current paywall does not allow users to read Internet articles without purchasing a subscription. Paywalls are often used to prevent Internet users from accessing content for free. Strategies that limit free usage are often seen as a way to increase revenue, but can be risky. These restrictions can limit the number of Internet users and traffic. However, the company believes that the Spotify perks may increase subscribers.
The Times has 153,000 digital subscribers and 207,000 papers subscribers. The partnership will try to boost the subscriptions of the English publication by providing more services to younger audiences. The Times has traditionally had older audience and the company is trying to increase younger subscribers.
According to Ken Doctor, a journalist for the Nieman Journalism Lab, the goal of the new partnership is to provide more services and charge more money.
“The strategy: Push forward strongly into membership-based digital relationships, giving the customers more — and expecting more in payment,” Doctor said.
Doctor also believes that this partnership makes sense for several reasons. First, the Times readers are passionate about the news, but they also care about music. According to Doctor, both Spotify and the Times have similar demographics among subscribers. Most subscribers to both services are often part of the upscale community. Second, the Times will have musical artists contribute to the news portion, which could also increase younger subscribers.
The new business strategy can make an online subscription more appealing, but this may be a move to increase subscribers as Spotify prepares for a potential IPO or commonly known as an initial public offering. The potential IPO would allow Spotify to sell stock of the company to the public via a stock exchange.
The music company provides some news services in their application, but the new partnership may be a way to increase revenue.
Regardless, the new type of subscription could change how newspapers attract new subscribers.