Spotify plans new premium tier, expected to include HiFi audio
SPOTIFY Technology SA is planning a more expensive subscription option that鈥檚 expected to include high-fidelity (HiFi) audio in an effort to drive more revenue and placate investors who鈥檝e been saying the company should raise its prices.
To augment its current 鈥淧remium鈥 tier, Spotify will give subscribers expanded access to audiobooks, either through a specific number of hours free per month or a specific number of titles. There will be an option to purchase more. Currently, the company only sells audiobooks 脿 la carte through its app. Spotify plans to introduce that feature in the US in October, after first launching in markets abroad.
鈥淎t Spotify, we are constantly iterating and ideating to improve our product offering and offer value to users,鈥 a company spokesperson wrote in an e-mailed statement. 鈥淏ut we don鈥檛 comment on speculation around possible new features and do not have anything new to share at this time.鈥
Shares fell 2.7% to $155.73 at 10:44 a.m. in New York.
These changes might be enough to drive new revenue and maintain interest in a stock that has doubled so far this year to $159.99 per share. Spotify has been competing fiercely with the rival services from Apple Inc. and Amazon.com, Inc., both of which hiked their standard plans鈥 prices by a dollar in the US to $10.99 per month in the past year. Spotify鈥檚 $9.99 Premium plan, which includes access to podcasts and ad-free music listening, has remained the same in the US since the service launched stateside. The company also offers a free version with commercials.
Chief Executive Officer Daniel Ek said on an earnings call earlier this year that the company balances pricing changes with the desire to grow subscribers. In 2022, the company increased prices in more than 40 markets.
鈥淚t鈥檚 definitely something that we鈥檙e doing, and we鈥檙e looking at it as a balanced portfolio approach, where in some markets we鈥檙e selectively increasing prices, because we鈥檙e in a more mature place,鈥 he said. 鈥淚n some markets, we鈥檙e mostly focused on growth.鈥
The company has been reining in costs this year in an effort to achieve profitability. It reduced staff by 6% in January and then cut an additional 2% of employees earlier this month. It also let high-profile podcast deals lapse and is looking to sublease floors in its New York City office. 鈥 Bloomberg
