Several reports have revealed that Spotify is planning to raise prices for its services. The new prices are expected to go into effect in 2021. In addition, the company has plans to add an extra premium tier to its service.
Price hikes expected in 2021
Streaming service Spotify is expected to raise prices in several markets around the world. As of June, subscription prices will increase by at least PS1 in the UK, EUR1 in Europe, and $1 in the US. In the US, the company will also raise the price of its Family and Student plans.
The company announced that it will raise prices in several countries and regions, including the UK, Brazil, and Australia. It also said that it would release financial results on 2 February. In addition, it would send emails to its subscribers to alert them of the changes.
The company reported an increase in both listeners and active users in the third quarter. The number of ad-supported users increased by a double-digit percentage. The company reported a net loss of EUR125 million in the third quarter, but exceeded its revenue projections. The company also reported a higher than expected number of paid subscribers.
Spotify is also expected to announce the launch of a new premium subscription tier. The company’s Platinum plan will include better audio quality, limited advertisements on podcasts, and other features. This is the first time the company has rolled out an extra tier of subscriptions.
Spotify will also report on monthly active users and subscription numbers. The company said it has more than 180 million users, with 195 paying subscribers. The company also said that it expects to have a gross profit margin of 30% in five years. This is an increase from 2021, when the company’s gross margin was just under 10%.
The company also announced that it would begin sending emails to its subscribers on Monday. This is the first step in the company’s plan to increase prices around the world.
Increases in more than 46 markets around the world
Despite its success, Spotify isn’t immune to criticism. Some artists, such as Neil Young, have pulled their music from the service. The Swedish startup also faced scrutiny over the Joe Rogan Experience podcast.
In the third quarter, Spotify reported wider-than-expected losses. Its subscription price increases in 46 markets around the world, including the US, were a success. The company also reported better-than-expected revenue.
Spotify is the world’s largest audio streaming subscription service. It offers an ad-free, music-listening experience and ad-free podcasting. The company boasts a library of 80 million tracks. It also has a growing roster of exclusive podcast content.
It also has a robust community of users and music algorithms to power its playlists. It pays artists a 70-30 split of the royalty fees they earn from the service. The company is also working on a “Platinum” tier for users willing to pay $20-30 per month. The Platinum level will include a HiFi feature. It will also offer a variety of other features.
Spotify has a strong subscriber base, with 456 million active users and 195 million premium subscribers. However, its gross margins have been sluggish. It has been hampered by royalty fees and high publishing rates. It hopes to improve margins with higher-margin podcasts and audiobooks.
Spotify’s biggest competitor in the music streaming space, YouTube, recently hiked its prices in the U.S. Last year, Spotify raised prices for multi-user bundles in several markets. However, the company hasn’t commented on whether it plans to raise prices globally.
Spotify has a large user base, but it hasn’t had a profitable year yet. Analysts are hopeful that the company will reach profitability again soon. However, with soaring interest rates and the cost of capital increasing, it’s difficult to achieve positive profit margins.
Plans to add an extra-premium tier
Currently, Spotify offers a Free and Premium tier. The Premium is available for up to six people for $16 a month. The Premium tier has improved audio quality and unlimited skips. It also includes device compatibility. You can download songs directly to your device. You can also create your own playlists.
Spotify offers a 30-day free trial. You can also try Spotify Connect, which allows you to play music on many devices, including smart TVs and Android and Apple devices. There is also a student discount.
Spotify has announced a new feature called “HiFi” that will allow users to listen to audio in high quality. It was announced at Spotify’s Stream On event, and is still under development. However, the company has not announced when this feature will be available. The most likely timeframe is later this year.
The HiFi feature was mentioned in a Spotify Platinum survey, and is said to be the most requested feature. The survey also mentions that the Studio Sound feature is available on both the Free and Premium tiers.
In May last year, Apple Music rolled out Spatial Audio with support for Dolby Atmos. In the coming months, Spotify might also launch its own spatial audio plans.
If you have Spotify Premium, you can create playlists and save songs for offline listening. You can also create shareable links and post songs to social media. Spotify also has podcasts. The Premium tier has a library of over 80 million songs.
Spotify offers a free trial of three months for PayPal users. The free tier offers limited features, such as the ability to play music on demand, but does not offer a curated selection of songs. The free tier also limits you to six skips per hour.
Earlier this month, Spotify (SPOT) notified its current subscribers of a price increase. Spotify has a premium plan that includes better audio quality, limited advertisements on podcasts, and other features. Previously, the Premium Family plan cost $15 a month. However, starting April 30, it will cost $16.
While the price increase might not be a game changer for consumers, it could be a win for Spotify. It is one of the most popular streaming services, and has a lot of pricing power. Its subscriber base has been growing steadily for the past two years, and it has also been making efforts to diversify its revenue.
In the third quarter of 2018, Spotify reported a revenue increase of 21% compared to the same period last year. Despite the rise, the company’s gross margin was not impressive. In fact, its gross margin for the third quarter was only 24.7%, which is below the average of 25.2% predicted by analysts.
Spotify has also been making some controversial moves, such as its deal with Joe Rogan, which could have moderation headaches. The company has partnered with DC Comics to produce a “Batman Unburied” podcast, and it has also partnered with Chernin Entertainment for a podcast to be turned into a movie.
Spotify has also partnered with Riot Games for the “League of Legends” esports partnership. It has released 58 original podcast shows this quarter, including “The Michelle Obama Podcast” that sent its show to the No. 1 spot on Spotify’s charts during the months of July and August.
The company also announced that it has added 6 million subscribers in the past three months. The company’s gross margin was lower than expected, but its revenue was above the average of analysts.
Earlier this year, Spotify made an announcement that it would begin selling audiobooks. At that time, the company said it would offer 300,000 titles from major publishers. In June, Spotify acquired the audiobook platform Findaway for $123 million. It plans to expand its audiobook library to other countries. In addition, Spotify plans to make editorially curated recommendations.
Spotify plans to compete with Apple’s Books and Amazon’s Audible, the two largest audiobook services. The company hopes to attract new audiences by offering a more fluid pricing model. Its royalty rates will be consistent with industry norms.
The company believes audiobooks will be an area of growth. Spotify plans to offer 300,000 titles from major publishers and independent publishers. The company believes that audiobooks will represent up to 50% of the total books market in countries with high audiobook penetration. It forecasted that audiobooks could have a gross margin above 40%.
In order to make a purchase, Spotify users must go online. They are redirected to a page with information on where to buy. However, there is no price information available in the app. The app also displays a mostly empty screen when making a purchase.
After Spotify came into compliance with Apple’s rules on audiobooks, it began selling audiobooks. The company did not offer discounts to subscribers during the initial launch. But they did offer the option to sign up for a free premium account. It also sent email links to purchase books.
The company claims Apple’s rules made it hard for customers to find their favorite books. It also said Apple’s rules prevented it from selling audiobooks inside the iOS app. It offered three workarounds to circumvent the rules. However, these were rejected by Apple.