Several recent reports have mentioned that Spotify will be raising prices for its plans. This may not come as a surprise to some customers who have been using the service for a long time. In fact, the company has not lost any customers to price increases in the past. It is expected that prices will be raised in the US in 2021.
Price hikes are expected to happen in 2021
Despite achieving substantial growth in the third quarter, Spotify has announced a significant price hike. The price hike is expected to happen in 2021. The company has not announced a pricing strategy for the US, however.
Spotify is one of the world’s largest music streaming services. It has over 180 million users worldwide. The company’s monthly active users have increased by a substantial double digit percentage over the past year. It also reported an increase in its paid subscribers. Spotify has offices in the US, Canada, Mexico, India, and Europe.
Spotify has recently acquired several companies including Audiobook partner Findaway, radio station Whooshakka, and podcast analytics product Chartable. The company also rolled out a personalized home feed for users. This should boost user engagement.
Spotify also plans to add a new HiFi feature to Premium accounts in the US this year. This feature will provide CD quality audio. The company has also released 100 new original podcasts globally.
Spotify’s gross margin has been squeezed by cost inflation. The company’s gross margins in Q3 fell below analyst expectations by 50 basis points. However, Spotify beat its revenue expectations by 21%. The company reported 195 paid subscribers and a substantial increase in active users.
Spotify has a low churn rate, with only 2.4% of its users canceling subscriptions. It also has a high platform stickiness. Its global revenue is expected to grow at a 21% annual rate through 2022. It is expected to become profitable in 2022.
Spotify has also announced plans to expand into 80+ markets. The company plans to launch its Audiobook platform in several countries. Spotify also plans to integrate its various platforms into a single, easy-to-use user interface.
The company hasn’t lost customers to price hikes in the past
Despite a recent price hike, Spotify hasn’t lost subscribers to the new rates. Instead, more people have signed up for the service. And the company is making a big push in Asia and Africa.
In 2020, Spotify paid more than $5 billion in royalties to the rights holders of music. But the average revenue per premium subscriber has declined in recent years. And the company hasn’t turned a profit yet. It has booked a net loss of $38.8 million on $11 billion in revenue in 2011.
The company has forayed into direct distribution deals with artists. But it’s trying to get artists to pay a smaller percentage of royalties. It also is testing a higher price for family plans. And it’s buying podcast networks Anchor FM and Gimlet Media.
But if the music industry doesn’t agree with the new pricing, it could lead to a backlash. And some musicians may choose to cancel their subscriptions. They make millions of dollars selling music rights, but they also lose control over how their music is used.
It’s unclear if Spotify will actually raise the price of its subscriptions. That’s because it has a hard time turning a profit. And it relies on discounts to attract new subscribers.
But there are ways that the company could make streaming more profitable. For example, it could tweak the way it handles nobs, or increase the number of royalties it pays to music rights holders. It could also crack down on discount prices.
Spotify’s CEO Daniel Ek has spent a lot of time evangelizing streaming music. He believes the company’s relationship with the music industry will get better as it grows.
Ek says he’d like to raise prices in the US in 2023
Streaming audio giant Spotify has surpassed Apple as the world’s largest podcasting platform. It boasts more than 420 million subscribers and hosts over 4 million podcasts. It has also grown revenue, with total ad sales topping EUR1.2 billion last year. Spotify also plans to launch millions of shows in the coming years. It wants to become the go-to place for regular people to earn money by talking.
Last week, Spotify CEO Daniel Ek spoke to The Wall Street Journal about his company’s revenue and subscribers. He said the company’s revenue was better than expected. He also said the company had double-digit YoY growth in ad-supported users. He said he’d like to raise subscription prices in the US in the next couple of years.
A few months ago, Spotify CEO Daniel Ek responded to controversy surrounding the company’s COVID-19 content advisory. He said the company had added the content to podcast episodes. The company has also vowed to increase transparency about its policies.
Meanwhile, Spotify has been promoting its freemium subscription model, which offers access to millions of songs and podcasts for $10 a month. However, the company has struggled to convince Wall Street of its value. This is one of the reasons why its share price has fallen over the past few months.
Ek said that the company plans to invest in projects that will pay off in the long run. He added that he would like to see more original podcasts.
He also told the Wall Street Journal that he would like to raise the price of Spotify’s individual subscription plan in the United States. He said he hopes to do that next year.
Spotify’s subscriber base continues to grow
Despite the growth that Spotify has been experiencing in recent years, the online music distribution platform is still facing a serious competition from the likes of Google and Apple. These companies have released their own streaming music platforms. They have also gained a good share of the global subscription market. But even with the increased competition, Spotify has managed to stay on top of the charts.
Spotify has expanded its user base over the last five years. The platform hosts a large collection of podcasts and music videos. It also allows users to create playlists of their favorite songs. They can listen to songs and podcasts from any device. The platform is used by more than 184 countries and has a strong brand awareness across the world.
The company has invested in a variety of different programs to attract new users. It has also expanded into new markets. In May, the company started connecting its users with friends and family members. It has also introduced a group feature for parties. The company has also increased its investment in original content.
While Spotify has continued to lose money, it has managed to offset that with strong growth in its ad-supported business. The company said the ad-supported business grew by a staggering 110 percent in the second quarter. Its advertising revenues climbed to $331 million.
Spotify’s subscription count for Premium users grew by 14% in the second quarter. The company’s premium gross margin rose to 29.2% in Q4. The company added seven million Premium subscribers globally in the second quarter.
Spotify’s subscriptions include a mix of paying users and ad supported users. The company’s ad-supported subscriptions are used to promote the company’s premium services. The company uses ads to convert ad supported users into paying subscribers.
Apple Music is raising prices
Earlier this year, Apple announced that it was increasing the prices of several services including Apple Music, Apple TV+ and Apple One. The company cites increased licensing costs as the reason for the price increase.
As the price of streaming services rise, copyright owners and creators gain a larger payoff. The Apple Music price increase should be a boon for musicians and music fans. It should also help Spotify stock, which is down 60% this year.
Apple’s new pricing announcement has the potential to help the company grow revenue without adding new subscribers. Spotify could attract more users from competing platforms. The company holds a nearly double share of the global music streaming market. In addition to that, the company has a huge number of subscriptions.
It’s not the only company to increase its subscription rates this year. Netflix and Disney have also gotten price bumps.
The Apple Music price increase is the first major price increase from Apple in the US. It will be effective immediately for new subscribers and in a rolling wave for current subscribers. However, it’s not expected to affect the company’s student plans.
Apple is also planning to introduce Lossless Audio and Dolby Atmos into Apple Music. This should improve the audio quality of all subscribers. The company plans to introduce these features by May of 2021.
The new pricing for Apple Music will also allow for better audio quality and a slew of other features. The company will also allow for family sharing on its plans. This should help it compete with Spotify’s family plan.
Despite the price increase, Apple will continue to offer innovative features for its subscribers. For example, Apple TV+ supports 4K HDR as a standard.