During a third-quarter earnings call with investors, Spotify acknowledged reports regarding its crackdown on Family Plan sharing, describing the new approach as a routine improvement to existing verification tools.
Support documentation from Spotify shows that recent reports outlined a new QR code verification system. The app asks Family Plan members to verify that they reside with the plan manager by scanning a QR code shown on the manager phone using their own device.
Users receive a notification and have seven days to scan the QR code. Individuals living elsewhere who lack immediate plans to visit home may face difficulties. Missing this verification window prevents users from joining another Family or Duo plan for 12 months, requiring them to switch to a paid individual plan.
This update aims to increase subscriptions for profitable Premium plans, stopping adult children or friends living at different addresses from exploiting the system to obtain discounted rates through shared Family Plan subscriptions.
An investor questioned the crackdown and its implications during the earnings call, but Spotify co-CEO Alex Norström minimized the shift, rejecting the term crackdown in favor of routine improvement.
"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.
Norström stated that efforts to improve user verification lack a specific end date and will never truly finish, functioning instead as continuous routine enhancements.
