Music streaming service Spotify and Deutsche Telekom are partnering up to automatically offer Spotify premium accounts as part of new smartphone deals.
It’s not the first such partnership for Spotify, which has similar carrier bundling deals in place in the UK, France, Spain and a handful of other European countries. It is the first such deal for the company in Germany, which Spotify entered, relatively late to the music streaming party, in March 2012.
Under the terms of the deal, Deutsche Telekom will from October offer a mobile service with Spotify premium built in for €30. From the end of the year, other Deutsche Telekom users will be able to add premium Spotify to their accounts for about €10.
Deutsche Telekom will handle billing, which should make life easier for Spotify, and there’ll be no cap on listening as use of Spotify won’t affect mobile data volume tariffs.
The deal is an exclusive for Deutsche Telekom for one year and will presumably be opened up to other providers afterwards. Telefonica’s 02 in Germany already offers music streaming to customers through local Spotify rival Simfy.
Global growth – and the losses to show for it
The deal will be a welcome boost for Spotify, founded by Daniel Ek and Martin Lorentzon (pictured above) and backed by $188 million of venture capital funding from investors including Kleiner Perkins Caufield & Byers, Accel Partners, Sean Parker’s Founders Fund and Yuri Milner’s DST. The company – now numbering about 15 million users across 15 countries, with about four million paying subscribers – lost €45.4m in 2011, despite bringing in revenue of €187.8m compared with €73.9m in 2010.
Germany’s known as a particularly tricky market for those in the music streaming biz, thanks to vigorous music rights collection agency GEMA, first blamed for Grooveshark’s shutdown and now making life difficult for YouTube in the interests of protecting musicians’ rights. As Europe’s largest economy, though, it’s also a lucrative one – and one arguably primed to pay for the music it consumes.
Other players in the music streaming space in Germany include Deezer and Simfy. Spotify’s DACH country manager Stefan Zilch and Simfy CEO Gerrit Schumann will both be speaking next week as part of major consumer electronics fair IFA in Berlin.