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Spotify will work with Hulu to offer student-centric offerings. Source: Shutterstock/David M G

Spotify and Hulu lure students with cheap content bundles

STUDENTS are an untapped segment in the technology world, but some companies are gearing up to cater to this demographic that has small disposable incomes and millennial tastes. Two of them, Spotify and Hulu LLC., are bundling their services with low price in order to attract young audiences onto their platforms.

Students will be able to access packages for US$4.99 a month, US$13 less than current costs. The promotion is only available for students enrolled in Title IV-accredited colleges or universities in the United States, meaning colleges that take federal student loans.

The package will include Spotify’s premium ad-free platform, as well as a subscriptioon to Hulu’s ad-supported streaming service. According to a joint statement from the companies, they will split the profits and Hulu will sell adds to make up the difference.

The move is a savvy one from the two companies, especially as global student continues to creep up and spending habits change. According to Euromonitor, the world’s demographic is always growing as education continues to be a huge driver of status and economic opportunity. Companies that cater to students on shoestring budgets and with fresh licenses for freedom can stand to gain by building strong brand awareness early on, while also indicating their awareness of today’s high cost of education.

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“Leaving home to begin university is a life-changing experience for young people,” Euromonitor says in its Global Student Market report. “In the absence of parental supervision of leisure activities and discretionary spending, students are free to experiment with their own budgets on a much greater scale than when they were at home.

“Though students may be price sensitive and living on restricted budgets, they are a market worth tapping. These consumers will be among tomorrow’s largest spenders, and many companies are prepared to focus on building brand awareness among students in the hope of gaining life-long loyalty.”

This is the first time Spotify has embraced such a relationship with a TV or movie product. Hulu may lack the reach and global brand awareness of competitors Netflix and HBO, but it offers a wide range of content including “The Handmaid’s Tale” and “The Mindy Project”, and its relationship with Spotify is sure to draw more eyeballs to its platform.

“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 according to Bloomberg.

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The pairing taps directly into millennials’ demand for music and video content without the traditional trappings of long-term packages as offered by cable networks. The rise of such bundles marks the beginning of Internet-centric services strategy to replace traditional players as the main distributors of content. Across the world, demands for pay-TV services is declining, and Internet players such as Netflix, Crunchyroll and Brown Sugar will likely follow in the footsteps of Hulu.

Amazon already offers such a service through its Prime membership package – subscribers can access same-day shipping, music streaming, and video content.

Paid media services have particularly struggled with students with small percentages of disposable incomes. Spotify and Hulu’s tie-up could be the first solution to that problem.