Spotify users can expect a price hike in 2023
The world's most popular music streaming service is set to become more expensive next year
➡️ The Shortcut Skinny: Spotify price increase
💰 Spotify monthly subscription fee of $9.99 is set to rise in 2023
🆚 Spotify CEO Daniel Ek revealed the company would be following the price increases seen by YouTube Premium and Apple
📈 The company posted a better-than-expected rise in revenue for the latest quarter
🎧 Spotify now has 456 million monthly active users, an increase of 20%
Spotify co-founder and chief executive Daniel Ek has confirmed that Spotify US users can expect to pay more for their monthly subscriptions in 2023.
The music streaming platform recorded a rise in revenue and users for the last quarter, but that isn’t stopping Spotify from raising its prices.
Daniel Ek, who recently bid over $2bn to buy Arsenal football club, said in an interview that the price hikes should benefit label partners and artists, and not just the bottom line of the Swedish-based company.
Spotify’s decision follows the likes of YouTube Premium and Apple Music, both of which have raised the price of a monthly subscription this year. That’s a good thing according to Ek, who said in a conference call following the company’s latest financial report (thanks, Wall Street Journal), “When our competitors are raising their prices, that is really good for us.”
Ek also wasn’t phased by losing customers to the price increases and said that Spotify has implemented several price increases in markets outside the US and hasn’t lost any users. Spotify remains a “great customer value proposition”, according to Ek.
Spotify performed better than expected in its third quarter. The music subscription service now has 456 million monthly active users and 195 million paid subscribers. Revenue was up 21% from the year-earlier quarter, but slower ad growth and heavy investment made the balance sheet less favorable overall. Perhaps surprisingly, shares fell by more than 5% after the market closed.
Spotify’s finance chief Paul Vogel said that 2023 could see Spotify’s profitability rates improve, as 2022 was seen as a year of investment. “While it is too early to provide any guidance with respect to 2023 as we grow revenue, we do expect our profitability rates to improve relative to 2022 as we grow revenue, lap certain investments and deploy capital efficiently,” Vogel said.
One of those areas of investment could be Spotify’s HiFi audio plan. Spotify looks set to launch a new Platinum plan, which will finally add high-res audio support two years after it was announced. The new tier will likely cost $19.99, and also promises to offer additional features to subscribers such as limited ads for podcasts, a Headphone Tuner, Studio Sound, Library Pro, and Playlist Pro.
Spotify has lagged behind its rivals when it comes to HiFi audio, with Apple Music including lossless audio and Dolby Atmos as standard. Other platforms such as Tidal, Deezer, Amazon Music, and Qobuz have also given users the choice to stream music at higher quality for the past few years.
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