Spotify has partnered with Vodafone Ireland, one of many country-specific branches of the international telecom giant. The deal is another instance of a music service joining a telecom carrier in a synergy that benefits both companies. We are certain it is a trend that will accelerate in 2014.
Vodafone’s global customer base surpasses 400-million, and its Irish subscriber base is 2.35-million users. Billboard notes that Vodafone is committing a $2-million marketing campaign to the alliance. Spotify is now built into some of Vodafone Ireland’s high-data plans.
Financial details are not public, but the advantage to Spotify is clear-cut. Vodafone (and any telecom company) owns the billing relationship, usage contract, and device. Putting a music service into that ecosystem is powerful in the same way as Apple bundling iTunes Radio into a platform that contains millions of user credit cards. It moves the music service upstream from the device into the pipe which feeds content to the device — a more unassailable position for Spotify.
For Vodafone, Spotify becomes a key brand attraction, making their smartphones instantly-enabled mobile music machines. Like any ecosystem, telecom companies strategize around retention. Keeping mobile users musically happy is increasingly crucial.
Users win too, especially existing Spotify subscribers. They can cancel their stand-alone subscriptions, possibly save money with the bundled Vodafone version, and simplify their media payments.
In October, Rhapsody joined forces with Telefonica, another international behemoth, in what could be an antidote to that service’s daunting U.S. competitive problems. Deezer, the Paris-based music subscription platform that operates throughout Europe and other continents, has used telecom partnering (e.g. Deutsche Telekom) as a strategic pillar, and rumors say that Deezer is searching for a cell partner to substantiate a U.S. launch in the next few months.