71/264 Premium Our Premium Service provides Premium Subscribers with unlimited online and offline high­quality streaming access to our catalog. In addition to accessing our catalog on computers, tablets, and mobile devices, Users can connect through speakers, receivers, televisions, cars, game consoles, and smart watches. The Premium Service offers a commercial­free music experience. We generate revenue for our Premium segment through the sale of Premium Services. Premium Services are sold directly to end Users and through partners who are generally telecommunications companies that bundle the subscription with their own services or collect payment for the stand­ alone subscriptions from the end User. We offer a variety of subscription pricing plans for our Premium Service, including our standard plan, Family Plan, and Student Plan, to appeal to Users with different lifestyles and across various demographics and age groups. Our pricing varies by plan and is adapted to each local market to align with consumer purchasing power, general cost levels, and willingness to pay for a music service. Our Family Plan consists of one primary Premium Subscriber and up to five additional sub­accounts, allowing up to six Premium Subscribers per Family Plan subscription. In addition, as we have entered into new markets where recurring subscription services are less common, we have expanded our subscription products to include prepaid options and durations other than monthly (both longer and shorter durations), as well as expanded both online and offline payment options. Premium partner services are priced on a per­subscriber rate in a negotiated agreement and may include minimum guarantees for the number of subscriptions that will be purchased from us. Revenue for our Premium segment also is a function of the number of Premium Subscribers who use our Premium Service. As of December 31, 2015, 2016 and 2017, we had approximately 28 million, 48 million, and 71 million Premium Subscribers, respectively. New Premium Subscribers are sourced primarily from the conversion of our Ad­Supported Users to Premium Subscribers. Through both our online platform and external marketing efforts, we engage our Ad­Supported Users by highlighting key features that encourage conversion to our subscription offerings. These efforts include product links, campaigns targeting existing Users, and performance marketing across leading social media platforms. Additionally, new Premium Subscriber growth is driven by the success of converting Users from our bi­annual trial campaigns to full­time Premium Subscribers. These bi­annual trial campaigns typically offer our Premium Service free or at a discounted price for a period of time and accounted for approximately 27%, 23%, and 20 % of total gross added Premium Subscribers for the years ended December 31, 2015, 2016, and 2017, respectively. The rate of net growth in Premium Subscribers also is affected by our ability to retain our existing Premium Subscribers and the mix of subscription pricing plans. We have increased retention over time, as new features and functionality have led to increased User engagement and satisfaction. From a product perspective, while the launches of our Family Plan and our Student Plan have decreased Premium ARPU (as further described below) due to the lower price points per Premium Subscriber for these Premium pricing plans, each of these Plans has helped improve retention across the Premium Service. As a result, while Premium ARPU declined by 9% from 2015 to 2016 and 14% from 2016 to 2017, in part due to the launch of the Family Plan in 2016, Premium Churn declined by 1.1% from 7.7% in 2015 to 6.6% in 2016 and declined by an additional 1.1% from 6.6% in 2016 to 5.5% in 2017. With the growth in higher retention products, such as our Family Plan and Student Plan, we believe these trends will continue in the future. Our platform is built to work across multiple devices, including smartphones, desktops, cars, game consoles, and in­home devices. We have found that Premium Subscribers who access our Service over multiple devices have higher engagement and lower Premium Churn, which increases their expected lifetime value to Spotify. 64