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Spotify Pitches College Kids: Half Off Subscriptions While You're in School

A burst of new subscribers might be nice before an IPO.

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Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

Streaming music services are getting more popular. How much more popular would they be if they were cheaper?

Spotify will start finding out today. The subscription music company is cutting the price of its premium service in half, from $10 to $5 a month, for college students in the U.S.

The offer is meant to cover just about any student in four-year, two-year or junior college, and is good for up to four years. Spotify will use verification service SheerID to make sure anyone who applies for the discount is enrolled.

To my mind, this looks like Spotify’s most aggressive growth gambit in the U.S. since it launched here in 2011 with help from Facebook. Since then, it has added at least one million paying American subscribers, but by the company’s own admission it would like many more. So targeting a pool of 22 million college students makes some sense.

Those discounts won’t be cheap for Spotify, since it still has to pay music owners a minimum fee for the use of their songs. On the other hand, last fall Spotify raised $250 million, at a valuation of $4 billion, so it has some cash lying around. A burst of new subscribers might be helpful for the company as it mulls an IPO.

This isn’t the first time a music service has tried this gambit. Rdio, which by all accounts trails far behind Spotify in terms of user numbers, started offering half-off subscriptions for $5 a month last fall. And Spotify has offered a similar deal to U.K. students since 2012.

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