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Spotify Teams Up With Capital One for Half-Off Music Subscriptions

Variety logo Variety 5/10/2017 Janko Roettgers
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Music streaming service Spotify has teamed up with Capital One for a new promotional offer that effectively cuts the cost of a music subscription in half: Consumers who pay for their Spotify Premium subscription with a qualifying Capital One Quicksilver card will get 50 percent off their monthly fees.

The same offer is also valid for Spotify’s student or family plans, which effectively means that students can get access to Spotify’s ad-free premium tier for as little as $2.50 per month. And Capital One customers who don’t have a current paid Spotify subscription can get a three-month free trial.

The offer is valid until April 30 next year, and works like a typical credit card cash-back deal: Consumers pay Spotify the full monthly fee, and Capital One is reimbursing them half of that amount after one or two billing cycles. Interestingly, the offer also covers any future Spotify price increases.

Asked whether the 50 percent savings would come out of royalties for rights-holders, reps from both Spotify and Capital One declined to share details on the financial aspects of the partnership. However, a source close to the situation told Variety that the funding does not come from royalties and is being covered by Capital One, which seems to be supported by the wording in the legal terms of the deal on Spotify’s website.  Promotional offers have been a cause for conflict between artists and music services in the past. Notably, Apple Music got into a high-profile row with Taylor Swift and others when it initially planned to not reimburse artists for promotional streams during the service’s free trial period — a policy that the company eventually walked back on.

The partnership comes with an obvious upside for Spotify, which is racing to grab as much market share as possible ahead of a planned IPO later this year. The fact that existing subscribers are eligible as well should also help the service with user retention. Two months ago, Spotify announced that it surpassed 50 million paying subscribers.

But there’s also an upside for Capital One: By some estimates, credit card companies pay as much as $250 in marketing to acquire a single customer, which is why cards often come with tens of thousands of free airline miles. Compared to that, music subscriptions may actually be a cheaper incentive.

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