Spotify is asking users with premium family plans to confirm their home address through GPS data or risk losing access to the service. For Spotify, a family constitutes 2-5 people living in the same home, which IRL is not necessarily how families work. So why are they looking into this now?
A story published in Billboard last month revealed that streaming family plans had some music industry executives concerned about Spotify’s slipping average revenue per user. According to Billboard, nearly half of global streaming subscribers (including platforms such as Apple Music and Pandora) are on family plans. Spotify’s ARPU declined 12% in the second quarter of 2018 compared to the same time last year, and Billboard’s Hannah Karp writes: “Family-plan price bumps could help compensate for the potential revenue being lost when family-plan subscribers share their passwords with friends outside their families.”
In today’s climate of data breaches and hacks, consumers are more weary than ever to share such information. However, Spotify is assuring users the data will only be used for verification purposes.
Why it’s hot:
Shared subscriptions have been user hacks and a thorn in subscription services’ sides for some time, but finding the solution to verification is still a mystery.
In 2017, a Reuters survey of over 4,400 US adults who used services like Amazon Prime, Hulu, and Netflix found that 21% of users aged 18-24 have borrowed someone else’s password. If Netflix cracked down on password sharing, the company could make almost $400 million more per year, Quartz found.