The popular music streaming service Spotify has teamed up with Hulu to offer discounts to US college students. Spotify is looking to build on their dominant market share in music streaming while Hulu looks to gain ground to compete against Netflix. Spotify's premium membership is currently priced at $4.99 per month for college students while Hulu is $7.99 for their limited commercial plan. With the bundle, students can get both services for only $4.99.
It will be interesting to see how this plays out for both of the companies. While Spotify is king of music streaming at the moment, Apple music has been gaining ground over the years. The mega-company has the resources and funding to take over the market. Hulu is in a similar situation is that they are a much smaller company than Netflix. Both Apple and Netflix are publicly traded companies that are worth much more than Spotify and Hulu. Netflix is estimated to be worth $70 billion while Apple is worth a staggering $635 billion. Hulu is estimated to be worth around $25 billion while Spotify is worth a mere $3 billion.
I see Spotify as the true beneficiary of this deal. Spotify currently has an impressive 43% market share while Apple music has the second most at 20.9%. The price is the same at $4.99 for college students and adding Hulu as part of the price only adds icing to the cake. The only leverage Apple has over Spotify are the select few musicians that have taken their music off of Spotify to protest their free subscription.
Hulu will be banking on new users to pay the discounted price and then stay as subscribers after they graduate, paying the full price. Netflix currently holds 66% of the market share vs Hulu's 16.5%. I don't see Netflix being affected too much by this move. Netflix will continue to dominate Hulu as long as Hulu is only offering the limited commercial package as part of the Spotify bundle. Netflix offers more content for the same price without commercials. Unless there are specific shows that are exclusively on Hulu, Netflix will remain king.
No comments:
Post a Comment