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Spotify is cracking down on shared family plans

Remember when taking your own music on the go meant you had to preload your portable player with your own tunes? Those days are long gone thanks to the number of listen-all-you-can music streaming services available right now.

It’s quite amazing that for a small monthly fee, equivalent to the typical price of a single album, you can now listen to virtually any song or artist your heart desires … anytime, anywhere.

Competition between all these streaming services is tight, though, so each of them has its own set of perks to entice and retain subscribers. But are these perks eating through these companies’ bottom lines?

One service, in particular, is currently under fire for sending out these particular notices to its family plan subscribers.

Stern warning from Spotify

Spotify, one of the most popular (if not the most popular) streaming music services in the world, has started sending emails to some users with shared family plans asking them to send their GPS locations to confirm their home address.

Spotify’s email issues a stern warning: “If you don’t confirm, you may lose access to the plan.”

People are saying that this is an obvious attempt by Spotify to restrict subscribers who abuse their “Premium for Family” plan by sharing their discounted rate with their circle of friends instead of actual family members.

Understandably, the email notices are being criticized as “hostile” by some recipients since not all families live together. Some are also concerned about the privacy implications of the GPS location collection.

However, Spotify’s terms of service explicitly state that the “Premium for Family” plan can only be shared with up to five people who reside at the same address. In Spotify’s defense, the music streaming giant is merely enforcing the rules that the users agreed with in the first place when they signed up.

The company also stated in the notice that it will only use the GPS data to verify your location, nothing more.

 

This is why we can’t have nice things

A Spotify “Premium for Family” plan is a great way to save money on a premium subscription since for a single $14.99 rate, it lets you share it with up to five people. It’s actually a phenomenal deal for families who live under the same roof.

But recent data implies that not all of Spotify’s family plan subscribers are abiding by the service’s sharing rules.

A recent Billboard report revealed that nearly half of Spotify’s global subscribers are now on family plans but despite this increasing number, the company’s revenue actually declined 12% in the second quarter of 2018. This suggests that family-plan subscribers who share their Spotify accounts with non-family members are impacting the company’s profitability.

Although the notices are still confined to a few users, this is certainly the first time we’ve heard of Spotify require its Family plan subscribers confirm their home locations. The company did not verify a user’s family status in the past, making it quite simple to share a Family plan with anyone.

So what are Spotify’s options to deal with this problem? Well, it could either strictly enforce its one location rule (like what it’s trying to do now), reduce the number of people users can share a family plan with, or raise the price of the Premium Family plan altogether.

Billboard’s Hannah Karp then noted that “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.”

But password-sharing is not strictly a Spotify problem. It is a practice that streaming companies like Amazon Prime, Hulu, and Netflix have to contend with every day.

It’s still uncertain if Spotify is going to move forward with this policy but the company issued this official statement to address the issue:

“Spotify is currently testing improvements to the user experience of Premium for Family with small user groups in select markets. We are always testing new products and experiences at Spotify, but have no further news to share regarding this particular feature test at this time.”

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