Spotify and Hulu are teaming up–again–for a new offer.
Starting today, if you’re a Spotify Premium member, you’ll be able to add on Hulu’s ad-supported service for no additional charge. In other words, you’ll still pay $9.99 a month for the ability to stream The Handmaid’s Tale and then toggle over to Spotify for the show’s playlist. Alternately, if you sign up for Spotify Premium for the first time, you’ll get that plus Hulu for free for the first 30 days, and then be charged $9.99 a month.
There’s only one catch: The new, cheaper deal only lasts until June 10 of this year “or while supplies last,” Hulu joked in a blog post announcing the news.
This deal beats another partnership between the companies that was rolled out last April that charged customers $12.99 a month for Spotify Premium plus Hulu with ads.
Both deals show how Hulu is determined to grow its subscriber base to catch up to Netflix and Amazon, which are still significantly ahead in the streaming race. Hulu currently has over 25 million subscribers, whereas Netflix has more than twice that in the U.S. and 139 million overall. Amazon has also crossed the 100 million mark (though that’s the number of Prime subscribers and not necessarily people solely choosing Prime Video). By piggybacking on Spotify–which has over 96 million paying members and 207 million monthly active users–Hulu can create a kind of next-generation entertainment bundle with a company that is similarly popular with younger demos and that has a strong track record of converting its free users to paying subscribers. At this time, Hulu is a U.S.-centric service, so it’s reaching 30% of Spotify’s audience, or about 62 million (Spotify does not break out its Premium subscribers by country).
The need to grow Hulu is becoming more crucial as the company continues to bleed money. In the third quarter of 2018 alone it lost $440 million due to the high cost of original and licensed content for its ad-supported and live TV services. This problem will soon largely be Disney’s: The company will become a majority owner of Hulu once its acquisition of 21st Century Fox is complete. CEO Bob Iger has said that Hulu will be a streaming priority for Disney, which will use it as an adult-focused complement to Disney’s upcoming family OTT platform Disney+. He has also said that under Disney’s leadership, the goal will be to make Hulu profitable.
But what is this potential growth costing Hulu? Literally. Considering Spotify’s deep penetration and brand strength, as well as its improving operating margins, one has to assume Hulu is paying meaningfully to join forces with the leading music streamer. Which means more losses unless it can offset the cost of these new subscribers with ads.
“We know Hulu customers enjoy music just as much as they love television, so what better way to bring all of their favorite shows, movies, songs, and podcasts to them in one really attractive offer?” said Patrizio Spagnoletto, vice president of media and subscriber growth at Hulu. “As Hulu continues to become the number-one choice for TV in and out of the home, we will continue to make it easier for people to enjoy all of the best entertainment experiences they love, whenever and where they want, with promotions like these.”
Here’s how to sign up for Spotify Premium with Hulu:
Existing Spotify Premium users need only visit the Your Services Page on your Spotify account to activate Hulu’s ad supported plan as part of your account.
New Spotify Premium users can go to Spotify.com/hulu to sign up before June 10. As a benefit, new subscribers will receive their first 30 days of Spotify Premium free, so that’s free Spotify and Hulu and then $9.99 per month thereafter. (Subscribers currently paying $12.99 per month who signed up for the Spotify-Hulu bundle will automatically be moved to paying $9.99 for Spotify Premium.)