The New York Times’ New Partnership with Spotify Poses a Challenge to Competitors

When The New York Times announced its new bundled subscription with Spotify, other media organizations, and media critics, had plenty to say about it. Nieman Lab noted how the Times was stepping “outside journalism” with the bundle, while Mashable called the new subscription plan “intriguing.”

With the bundle deal, known as “All Access Digital subscription,” new U.S. Times subscribers who choose the plan get both an All Access subscription to the New York Times as well as Spotify Premium access. The Times subscription includes unlimited access to Times content and bonus subscriptions, while the Spotify Premium plan boasts ad-free streaming of all songs available on the platform, HD playback, and the ability to download content.

The rate for the subscription is $20 every four weeks for the first year, and $25 every four weeks after that. Given that a Times All Access subscription is $12.50 every four weeks on its own while Spotify Premium alone is $9.99 a month (totalling $22.49 per month separately), buying the bundle would save a new subscriber $29.88 in a year.

Details of the bundle subscription

The deal signals focused strategy from The New York Times to up its paid digital subscribers in order to offset declining print ad revenue. The Times’ stated reasoning for the deal is simple enough. “If you think about the places where people spend their time in media, they spend a lot on music and news,” the Times’ chief revenue officer Meredith Kopit Levien told Bloomberg, adding that the bundled subscription “made for a very positive association.”

Before the bundled offering, however, the Times’ subscription strategy was not significantly different from any other major news sources. Like other news organizations, they released mobile applications trying to break into new markets like mobile gaming, virtual reality, and real estate. Yet, one of its flagship reading apps, NYT Now, shut down in 2016 to lure in more digital, web-based readers. While the Times offers ten free online articles a month for unpaid users, the paywall is easy to bypass by accessing the articles through different devices or browsers. Not to mention, similar subscription offerings were provided by almost all of the Times’ competitors.

Both the Times and Spotify use the “freemium” model in their respective industries – offering some services for free but incentivizing users to pay extra for more features. However, Spotify has a better track record than the Times of converting free users into paid subscribers. With approximately 40 million paid subscribers and approximately 100 million users total, Spotify boasts a 40 percent rate of paying users, compared to the Times’ 3 percent.

Thus, the partnership created by the new bundle is symbiotic; the Times gets to take advantage of Spotify’s product with a higher free-to-paid conversion rate, while Spotify gets the legitimacy and strategic opportunities of partnering with one of the world’s most reputable news organizations.

Despite any questions of intention, it is still clear that the subscription bundle is still an innovative move, as most other major newspapers don’t offer any similar creative subscriptions. Papers like The Los Angeles Times, The Chicago Tribune, and The Boston Globe offer print and digital bundle subscriptions, where prices vary depending on how often, if at all, subscribers want papers delivered to their homes. Digital subscriptions often come with apps or newsletters. However, these outlets usually target their local markets for subscriptions – you’d be surprised to find a copy of The Tribune sold in a Charleston grocery store.

It’s The Washington Post that should be the most concerned about this bundle. As the Times’ main competitor, new subscribers from Generations Y and Z will need more incentives to choose a Post digital subscription, especially as most younger readers get their news through social media. The media world could potentially see the Post pair with more uncommon media sources, perhaps Netflix or other paid digital subscriptions, to provide subscribers with more value, tap into new markets eager to expand their digital lives, and keep up with the Times’ possible subscriber bump.

News outlets are still riding waves of new subscribers after the recent Presidential election, which provided welcome relief after many outlets – including the Times – saw losses. As always, it will take innovation, creativity, and strategic partnerships for print and digital media to engage new audiences and bring the news into more households than ever before.

Lauren Shiplett contributed reporting.

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