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Spotify HiFi Plan at $5 More, Subscribers Up 14%

Spotify to launch new premium plan with HiFi audio for an extra $5 per month, boosting margins and subscriber growth.

6/11, 10:43 EDT
Spotify Technology S.A.
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Key Takeaway

  • Spotify to introduce a new premium plan costing an additional $5 per month, offering HiFi audio and enhanced playlist tools.
  • The move follows recent price hikes in the U.S. and aims to boost margins; shares rose nearly 1% in early trading.
  • Spotify reported a 14% rise in premium subscribers, totaling 239 million, with projected monthly active users reaching 631 million for Q2.

New Premium Plan

Spotify Technology SA is set to introduce a new, higher-priced premium plan for its most dedicated users later this year, according to a report by Bloomberg News. The new plan, which will be an add-on for existing users, is expected to cost an additional $5 per month. This new tier will offer access to better audio quality and new tools for creating playlists and managing song libraries. The pricing for this new plan will vary depending on each user's base plan but is anticipated to average out to about a 40% markup.

The introduction of this new premium plan comes shortly after Spotify raised prices for its existing premium plans in the United States. This move is part of the company's strategy to boost margins following a reduction in marketing costs. Despite the price hike, shares of the Swedish company rose nearly 1% in early U.S. trading.

HiFi Audio Feature

One of the key features of the new premium plan is access to Spotify's high-fidelity (HiFi) audio. This feature was initially announced in 2021, aimed at allowing premium subscribers in select markets to upgrade their sound quality. However, the rollout of this feature was delayed. The new plan will finally make this high-quality audio available to users who opt for the upgrade.

The report indicates that the upgraded subscribers will benefit from this enhanced audio experience, which is expected to be a significant draw for audiophiles and music enthusiasts. The addition of new tools for creating playlists and managing song libraries further enhances the value proposition of the new premium plan.

Subscriber Growth

Spotify has seen a steady increase in its premium subscribers. As of the first quarter ended March 31, the company reported a 14% rise in premium subscribers, bringing the total to 239 million. This growth is a positive indicator for the company as it continues to expand its user base and enhance its offerings.

In addition to the increase in premium subscribers, Spotify has also forecasted monthly active users to reach 631 million for the second quarter. This projection reflects the company's confidence in its ability to attract and retain users through its diverse range of services and features.