14 DAY TRIAL // Spotify has been doing well drawing in new users but it has to expand its revenue streams if it wants to actually become profitable at some point. Ad revenue can only get you so far and users have been reluctant to move up to the paid premium subscription but the mobile area looks a lot more promising. The service already offers dedicated apps for the iPhone, Android and S60 devices but now it's announcing a new mobile option with a twist, albeit a rather predictable one, as it's partnering with 3UK to offer the service bundled with their HTC Hero handset with a two-year contract.
Users will pay £99 ($161) for the phone, the first Android-powered device offered by the network, and £35 ($57) per month for two years and will get all the Spotify they can handle, on their phone but also on their PC, with the unlimited premium subscription. The contract includes 750 mobile minutes, unlimited texting and data and Skype-to-Skype calls. Spotify's premium service comes in at £9.99 in the UK so the users are getting a pretty good deal.
The deal is actually completely unsurprising considering the ties between the mobile operator and Spotify. 3UK is owned by the Hutchison Whampoa corporation, which is in turn controlled by Li Ka-shing, one of the wealthiest men in the world and one of Spotify's private investors. At the time of the investment a bundling deal of some sort was widely speculated and has now come to fruition.
Spotify currently has two bundling deals in its native Sweden but this is the first one with a mobile carrier, though other similar deals may be in the works. The deal is also expected to be expanded to a greater selection of devices and products including Mobile Broadband, 3UK claims. Spotify is likely very pleased with the deal as well as it taps into a great revenue source, one that hasn't been exploited by music services so far, though not for lack of trying.