NEW YORK--Sprint (NYSE: S) is hoping its new partnership with Spotify will generate more interest in its new Framily calling plans. But, as a number of Sprint executives have pointed out, the carrier's Spotify offer is just the beginning.
"Today was about music, but there certainly will be more to come to show how we can leverage Framily and provide benefits to customers as they build their Framily network," said David Owens, Sprint's senior vice president of product development, during an interview with FierceWireless here on the sidelines of Sprint's Spotify announcement. "We think providing those customers with an incredible music service like Spotify will just make them happier with Sprint."
Owens' comments echo those made by Sprint CEO Dan Hesse during the carrier's earnings conference call, hours prior to its announcement with Spotify. "Framily has a lot of legs and I think today will just be the beginning of what you will be seeing moving forward in terms of what we're able to do to leverage Framily really as an innovation marketing platform," Hesse said, repeatedly referring to the Framily calling plans as an " innovation platform."
"Clearly the hope [for Sprint] is that you have enough people in your Framily plan and start subscribing to other services as well," said Current Analysis analyst Avi Greengart. He said such an approach could make the Framily plans "incredibly sticky."
Greengart said Sprint has the opportunity now to tie additional functions and services into its Framily plans to make them even more attractive. For example, the company could bundle its high-speed, high-capacity Sprint Spark tri-mode LTE service with a subscription to video streaming provider Netflix (NASDAQ: NFLX). Or Sprint could offer cloud storage, data synchronization or concierge and travel-related services.
"The possibilities of what you could do are endless," Greengart said, in terms of services tied to Sprint's Framily plans. Sprint will just have to decide what makes sense to pursue, he added.
Of course, Sprint isn't the first carrier to bundle services into its calling plans. Leap Wireless' Cricket enjoyed notable success with its Muve Music service, and AT&T Mobility (NYSE: T) offers discounted access to the new Beats Music streaming music service. More recently, Verizon Wireless (NYSE: VZ) added up to 25 GB of cloud storage to its new More Everything shared data plans.
Sprint announced its Framily calling plans in January. The plans reward customers who add additional subscribers to the plans by providing discounts on the monthly cost of service. The plans start at $55 per month per line for unlimited talk, text and 1GB of data; for each new Sprint customer joining a Framily group, the cost per person will drop $5 a month up to a maximum monthly discount of $30 per line. For example, a group of at least seven people will get unlimited talk, text and 1GB of data for $25 per month per line, excluding taxes and surcharges.
Under Sprint's new teaming with Spotify, which goes into effect May 9, all customers on Sprint's Framily calling plans will get a free, six-month trial of streaming music service Spotify. Once the trial is over, they will get Spotify at the discounted rate of $7.99 per month for Framily calling circles of 1-5 members; for 6-10 member circles, the price drops to $4.99 per month. However, after 24 months customers then must pay the standard Spotify price (currently $9.99 per month). Non-Framily Sprint customers will get a three-month free trial of Spotify and can pay the standard $9.99 per month after that.
During its earnings conference call, Sprint boasted of the popularity of Framily, noting that it now counts 3 million Framily customers out of its 54 million total customers. Hesse said the plans are the carrier's "fastest growing rate plans on record," and reached the 1 million customer mark in less than 40 days.
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