Last year Spotify introduced a special $4.99-per-month student rate to attract new users. While the move was meant to appeal to college students on a tight budget, the move may have backfired, Lowery said.
“This [decline in payment] appears to be the result of students currently paying $9.99 switching to the $4.99 service,” Lowery said to Digital Music News. “Or, put another way, Spotify is cannibalizing it’s own paying subscribers, resulting in lower revenues even as it loses overall popularity with these students.”
According the Lowery’s data, which comes from surveying 200 students over two years, the number of users who paid for the $4.99 rate has improved, but the number of users opting for the $9.99 rate dropped considerably.