Spotify today took another small step to tighten up competition in the European market today: it signed a deal with Orange to offer unlimited music services as part of “Orange Young,” a special subscription that Orange has devised specifically for the under-27 market in Switzerland. The tariff also includes unlimited calls and texts as well as mobile data allowances, with deals starting at $20 per month without a handset included (or $30 with selected handsets).
On top of this, Orange is also reselling Spotify subscriptions to all its customers — this deal, for $13.90 per month, is the same price as a pays if buying from Spotify direct. The advantage is that all the data consumed via Orange does not count towards your data allowance.
The deal signals how Spotify is continuing to use mobile carrier partnerships, and new business models, as routes to picking up new uers, on top of direct sales via its own site. Other Spotify partners include Yahoo in the U.S. as well as T-Mobile in Germany and Virgin Media in the UK.
Financial terms of the deal were not disclosed but this is a significant discount on Spotify’s normal fee for a month of Spotify premium — this normally costs $13.90. That could imply that either this deal is heavily subsidized by either Orange or Spotify — or both.
It’s not certain that a deal whether Spotify plans to cut more deals with its mobile carrier Orange in the future. But it’s probably unlikely: France Telecom, which owns the mobile carrier Orange, is an investor in Spotify competitor Deezer. Orange in Switzerland, meanwhile, operates under a license, and is actually owned by Matterhorn Mobile S.A., “a company indirectly majority owned by funds advised by Apax Partners LLP.”
“Spotify considers telco partnerships in each country on a case by case basis,” a source close to the company told TechCrunch. “This deal isn’t necessarily therefore a pre-cursor to a raft of more Orange deals, but telco partnerships remain an extremely important strategic partnership for Spotify, and it will continue to seek to execute more deals going forward, with whichever partner makes most sense.”
Adding Spotify to the Orange Young tariff will be a sweetener for Orange to sign on more young users. These are crucial to mobile operators, because they potentially represent lifetime customers. They are also avid consumers of mobile data, apps and other premium services. The same goes for Spotify, which can create more loyalty with users early on, making it harder for them to switch to other music providers.
The deal, which went live today, gives those who sign up for the tariff access to 20 million tracks to stream. Downloading, as we reported earlier this month, is no longer available in Europe.
“Spotify is the perfect addition to our Orange Young deals. This means anyone under the age of 27 can enjoy both a subscription tailored to their needs and their own personalised music selection – and this without any limits. Orange Young now not only provides mobile communications to cater for all needs, it offers music as well,” Orange VP Consumer Matthias Hilpert said in a statement.
Spotify launched in Switzerland in November, 2011 and this is its first carrier deal in the country.