It seems we’ve waited ages for music bundling with major mobile carriers to help fire up the streaming on-demand business and suddenly everyone’s talking to everyone else.
The latest is market leader Spotify finalizing a deal with Sprint, the No. 3 U.S. mobile carrier, to bundle an on-demand music service with Sprint family plans – similar to the AT&T packages Beats Music launched with in January.
Sprint has sent out invitations to a New York event on April 29 where CEO Dan Hesse is expected to unveil details of the plan.
News of the deal was first reported by Re/code. People familiar with the plan confirmed details to Billboard.
Sprint spokespeople did not respond to requests for comment and a Spotify spokesman declined to comment.
Spotify/Sprint have not yet received approval from the major labels, who own the rights to the music, but it is widely expected to be a formality given the labels are excited to have another major carrier take streaming services to middle America.
Mobile plan bundling is generally believed to be the Holy Grail for taking on-demand music services to mainstream users in the U.S. and Europe as the right kind of plan can make paying for music seamless – similar to how consumers pay for premium networks on their cable TV bills.
The long-stated goal for music services is to finaly achieve scale and at last turn a profit while increasing compensation for rights holders. For their part, mobile carriers are keen to bundle music and other content to help reduce customer churn – a key challenge for Sprint which had 54 million subscribers at the end of last year.
Launching a mobile bundle would be one more important step in Spotify’s run-up to a much expected IPO which many believe will happen later this year.
Recently Samsung inked a bundling deal with French on-demand service Deezer for its Galaxy S5 phone, and Rhapsody said it ramped up its subscriber base by over 60% in less than six months thanks to a partnership with Telefonica.
Sprint is controlled by Japanese investment firm Softbank, which is run by Masayoshi Son. About a year ago he made an audacious $8.5 billion bid for Universal Music Group which was rejected by French parent Vivendi.
Late last year Son was in talks to also buy the No.4 U.S. mobile firm T-Mobile even though U.S. regulators have hinted it would be tough to get merger approval. He told TV interviewer Charlie Rose last month (video below) he still wants to move ahead with the deal and merge Sprint and T-Mobile and start a mobile phone pricing war. Even combined Sprint and T-Mobile would still have fewer mobile customers than either AT&T or Verizon Wireless.