Yesterday, Spotify announced a promotion for new or existing premium subscribers, where Spotify will send each subscriber a Google Home Mini, simply by linking their Spotify and Google accounts. In a matter of a few clicks, Spotify subscribers can login, choose one of the four Google Home Mini, and within about 10 days receive their free smart speaker.
Google is basically liquidating their #GoogleHomeMini supply ahead of the holidays to make way for sales of the #NestMini.
How much are Google & Amazon spending on devices to win the #VoiceComputing war?https://t.co/RW5BXZ7MTJ
/cc @bretkinsella #ConvComm pic.twitter.com/KcjfV3S9Q5
— Chris Messina (@chrismessina) October 23, 2019
So why exactly are Spotify and Google teaming up this way? Well, on one hand, in order to get the free smart speaker, you need to allow Google to access your Spotify and all of the data within it. Google knowing all about your Spotify consumption habits, means that it can more intelligently feed you ads. If Google knows you listen to a specific artist regularly, then you’re going to suddenly see a whole lot more programmatic ads down the line tied to that artist – whether it be merchandise, tickets or affiliated content. (Many people already see these type of ads through Instagram or Facebook, since many Spotify accounts have been linked to Facebook through Facebook’s single sign-on.)
I mean, look at this… it's all about the Google Assistant (duh).#permissions #authorization #oauth pic.twitter.com/cgmyadvAHp
— Chris Messina (@chrismessina) October 23, 2019
The natural progression here though on Google’s end, as Chris points out in the tweet above, is to beef up Google Assistant’s contextual understanding of the user. Contextual awareness will be key in the evolution of the voice assistant as it matures to become proactive and even have agency on your behalf. For example, proactively notifying the user of upcoming shows, merchandise or related events based on what you’re listening to.
How we use smart speakers at home (Consumer Edge) pic.twitter.com/1FPS5WqYxH
— Bluegrass Capital (@BluegrassCap) October 21, 2019
Spotify’s motivation here is likely rooted in the insight that music is the current king of smart speaker use cases. Voicebot found in its January 2019 smart speaker survey, that streaming services are accessed daily by about 40% of users and monthly by about 70% of smart speaker owners. Smart speaker owners can access a number of different streaming services through their device, so, Spotify must be looking at this promotion as a way to help users establish Spotify as their default streaming option through their Google Home Mini.
Despite Apple Music, Spotify is growing faster in the US on iPhones than Androids pic.twitter.com/Ekg278mgp0
— Bluegrass Capital (@BluegrassCap) October 21, 2019
In addition to Spotify wanting to ensure that it’s the default streaming service out-of-the-box for those participating in this promotion, this promotion might also be a tactic to grow its Android footprint. Spotify’s subscriber growth is growing on iOS but flat-lining on Android. This might be one way Spotify tries to ignite some Android subscriber growth.
The loss on these products is primarily what I'm curious about… seeding the market for voice by giving these devices away at or below cost, and in this case, literally for free.
— Chris Messina (@chrismessina) October 23, 2019
Finally, this promotion ties into the broader theme of Amazon and Google, “seeding the market for voice” by selling the devices at cost or even at a loss. Amazon’s SVP of Devices and Services, Dave Limp, flat out admitted as much about Amazon’s Echo Buds to Bret Kinsella at this year’s Amazon event.
"There you have it. The $129 Echo Buds can be more feature-rich than AirPods not just because Amazon sells direct-to-consumer but also because they are not looking to capture any margin in the sale as long as it makes Alexa more accessible."
It's never been about hardware sales
— Dave Kemp (@Oaktree_Dave) September 30, 2019
We saw Google give away 19,596 Google Minis at the Golden State Warriors – Portland Trailblazers playoff game earlier this year. Google’s done similar offerings with Walmart too. As Google and Amazon continue to, “seed the market for voice,” it’s likely that we’ll see more of these type of promotions to come. In the meantime, go get yourself a free Google Home Mini.
Folks, I would suggest both parties are subsidizing these devices. There are more of these situation up soon. One very big one.
— Brian Roemmele (@BrianRoemmele) October 23, 2019
-Thanks for Reading-
Dave
