Spotify confirmed the reports of its crackdown on Family Plan sharing during its third-quarter call with investors, calling its new method “a routine improvement” to its existing verification tools.
Over the past several days, reports had surfaced indicating that Spotify was rolling out a “QR code verification” method, where the app would prompt members on its Family Plan to verify they lived with the plan manager by scanning a QR code. This code appears on the plan manager’s phone, which the plan member then needs to scan with their own phone, according to Spotify’s support documentation.
Plan members have seven days to complete the QR code after getting a notification, which means they could be out of luck if they live outside the home and aren’t planning a return visit anytime soon. If the verification window is missed, they won’t be able to join another Family or Duo plan for 12 months, but would instead have to shift to an individual plan that they pay for themselves.
The move is meant to boost subscriptions to Spotify’s profitable Premium plans, rather than allowing adult children or friends who live apart from gaming the system to get a cheaper plan by splitting a Family Plan subscription.
During the earnings call, an investor asked a question about the crackdown and what it means, but Spotify co-CEO Alex Norström downplayed the change, calling it a “routine improvement,” not a “crackdown.”
“Family Plan has existed for a long while. It has been around for, I think it is now close to 12, 13 years in Spotify history, and it makes up a pretty significant proportion of our subscriber base,” said Norström “As such, it is important for us to just make sure over time that we improve the verification methods that we have. There are certainly ways, over time, to find holes around it. As that happens, we figure out how to improve it over time,” he added.
The executive said that the company’s attempt to better verify its users is not something that would have an end date or would ever be complete, but would be considered an ongoing routine improvement.
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