Spotify, Hulu to Sell $4.99 Entertainment Bundle for Students

  • Companies slash $13 from price, will split subscription fees
  • Growth of on-demand entertainment providers spurs bundling

Spotify Ltd. and Hulu LLC will sell students their music and video services for a combined price of $4.99 a month -- a $13 discount -- in a bid to sign up young customers for a new kind of entertainment bundle.

Students enrolled at U.S. Title IV-accredited colleges or universities can sign up for the Spotify package, which will now include a subscription to Hulu’s ad-supported video service, the companies said Thursday in a statement. Hulu and Spotify will split the subscription fee, and Hulu will sell ads.

This is the first time Stockholm-based Spotify has packaged the largest paid music-streaming service with another company’s movie or TV product. Hulu, based in Santa Monica, California, offers customers reruns of “Homeland” and “South Park,” as well as original series “The Handmaid’s Tale” and “The Mindy Project.”

“By bundling our enormous catalogs of content together in a single, highly compelling offer, we’re making it easier for people to enjoy all of the TV and music they love, whenever and wherever they want,” Hulu’s head of distribution and partnerships, Tim Connolly, said in a statement.

Hulu and Spotify are two leaders of a new class of entertainment company offering songs and TV shows on-demand for a monthly fee over the internet. The growth of these services coincided with a decline in customers for traditional pay-TV services, whose bundles of dozens of cable channels cost far more than a monthly subscription to Netflix Inc. or Hulu.

Bundling Offerings

The proliferation of options, from Netflix to more-niche services like Crunchyroll and Brown Sugar, led many analysts to predict companies would eventually bundle their offerings in a manner reminiscent of a pay-TV package. Inc. is already attempting this with its Prime shipping, which includes subscriptions to video and music services, and another program called Channels.

A deal aimed at students could lead to further collaborations between Hulu, which is looking to gain ground on larger rival Netflix, and Spotify, which can use video services to retain customers who might be lured to rival Apple Music. Spotify has more than 60 million paid subscribers, and more than 140 million users in total.

Young students with limited disposable incomes are among the most elusive customers for vendors of paid media services. Comcast Corp., the largest U.S. cable provider, offers a special cable package to students at about 100 campuses.

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