Spotify offers 3 month Premium subscription for $1 amid looming competition

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Spotify is looking to lock up some new premium subscribers by offering three months of the service for 99 cents.

The deal is available through December 31, but note the fine print: You can't take advantage if you've ever subscribed to Spotify Premium before, or have signed up for a free trial of 30 days or longer. And once you sign up and put your credit card on file, Spotify will automatically bill you at the regular $10 per month price after the first three months.

Still, the offer is worth considering if you've only been using the free version of Spotify. With Premium, you can access the full on-demand catalog on smartphones, whereas the free version only offers shuffled playlists and radio stations. Premium also removes the advertisements and lets you stream at much higher bitrates (read: audio quality).

Some other features are also hidden behind the Premium paywall. You'll need a subscription to use Spotify with Sonos home audio systems and with TV set-top boxes such as the new Fire TV Stick. Spotify's new Uber integration, which lets riders play their music through the car's stereo system, requires a Premium subscription as well.

The story behind the story: Spotify is about to face some fresh competition from YouTube, which is now rolling out premium service called Music Key. Though it's only in a limited beta for now, it's arguably the biggest threat yet to Spotify, as YouTube is already the world's largest streaming music service. Spotify's holiday promotion is one way to pull in some new subscribers before Music Key goes public.

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