Spotify Introduces Upgraded Subscription with HiFi Audio
Spotify Technology SA intends to introduce a pricier subscription plan that is anticipated to offer high-quality audio as a means of generating additional revenue and satisfying investors who have been urging the company to increase its rates.
According to people familiar with the strategy, the new tier is Spotify’s most expensive plan and is likely to offer the HiFi feature that the company first announced in 2021. Spotify delayed the rollout of the product after two of its rivals. , Apple Music and Amazon Music, began offering the feature for free as part of their standard packages. The new level will be launched this year first in markets outside the United States.
To expand on its current Premium tier, Spotify offers subscribers broader access to audiobooks, either for a certain number of free hours per month or a certain number of titles. Possibility to buy more. Currently, the company only sells audiobooks through the a la carte app. Spotify plans to roll out the feature in the US in October after first rolling it out overseas.
A spokesperson for Spotify declined to comment.
Those changes may be enough to generate new revenue and sustain interest in shares that have doubled this year to $159.99 a share. Spotify has faced stiff competition from rival services from Apple Inc and Amazon.com Inc, both of which raised their standard package prices by a dollar in the United States to $10.99 a month over the past year. Spotify’s $9.99 Premium plan, which includes access to podcasts and ad-free music, has remained the same in the U.S. since the service launched stateside. The company also offers a free version with ads.
CEO Daniel Ek said in the earnings survey earlier this year that the company balances the pricing changes with the desire to increase subscribers. In 2022, the company increased its prices in more than 40 markets.
“It’s definitely something we’re doing and we’re looking at it as a balanced portfolio where in some markets we’re selectively raising prices because we’re in a more mature place,” he said. “In some markets, we are mostly focused on growth.”
This year, the company has curbed costs in order to achieve profitability. It cut staff by 6 percent in January and then cut 2 percent more workers earlier this month. It also let high-profile podcast contracts lapse and plans to continue leasing floors in its New York office.
