In context: Any time a company offers a service at a discounted rate, users will find a way to get that discount, even if it means cheating. Family subscriptions, whether it be Netflix or Spotify, are bound to have users gaming the system. Spotify wants to limit that by asking users to verify their address.
Spotify is tweaking its family plan yet again. This time the company is asking members on the multi-user subscriptions to prove they live in the same household.
In August, Spotify posted new terms and conditions. The agreement now requires all members listed under the family subscription to prove that they live at the same address upon activation of the plan. The ToS also states that Spotify may ask for re-verification from time to time.
The company will use Google Maps address search for verification and will terminate the account if they discover any members using it who are not eligible.
“Spotify reserves the right to terminate or suspend access to the Spotify Premium Family service and the Spotify Premium Family account(s) immediately and at any time if you fail to meet the eligibility criteria and as otherwise set out in the Spotify Terms and Conditions of Use.”
"In order to be eligible for the Premium Family Subscription, the primary account holder and the subsidiary account holders must be family members residing at the same address."
A year ago, the streaming service tested a similar verification method using GPS but canceled the test over backlash from privacy advocates. It is unclear how using Google Maps rather than GPS changes the privacy concerns.
Spotify is clearly in the right for wanting to be sure everyone using a family plan is eligible. It still has to pay the record companies and artist for the streamed content, and at a discounted rate, the family plan is already a money-losing venture or break even at best.
A standard subscription cost $10 per month. The family plan costs $15 per month and can have up to six active users. That would be one quarter the cost versus all six users having individual subscriptions.
Furthermore, Billboard notes that almost half of Spotify’s customers are on family plans. This large pool of discounted users is what led the service to test the waters on raising the price of the multi-user subscriptions last month in Scandinavia, its largest market.