Spotify subscribers hit a high as it hikes rate prices
More Spotify listeners are tuning in to the app’s services than ever as the Swedish streamer cranks up its premium prices looking to bolster profits.
Subscribers to the streamer’s premium ad-free service have leaped by 10m since the previous quarter, up to 220m, Spotify reported today in their second quarter earnings.
Monthly active users also rose by 36m, beating expectations of 21m, and hitting 551m in total – the highest ever for the company.
However, operating loss was €247m (£213m) which the company said was “primarily impacted by charges related to our actions to streamline operations and reduce costs”.
Shares plunged more than 10 per cent in mid-morning trading and dipped even further in the afternoon to lows of 16 per cent.
The results come a day after Spotify announced it has upped premium subscription prices in its drive to boost profitability.
From yesterday, solo users must shell out £10.99 instead of the previous £9.99, while family account holders’ fees rose from £16.99 to £17.99 (for up to six people).
“The market landscape has continued to evolve since we launched. So that we can keep innovating, we are changing our Premium prices across a number of markets around the world,” Spotify said in a statement.
“These updates will help us continue to deliver value to fans and artists on our platform,” it added.
This move aligns Spotify with other key players like YouTube, Netflix and NBC Universal’s Peacock service, all of whom have recently raised their subscription prices to try to keep pace as the streaming wars heat up.
Amazon Music also raised its ‘Unlimited Individual Plan’ by $1 in January, up to $10.99 per month.
Spotify is reportedly gearing up to introduce a premium tier called “Supremium,” offering high-fidelity (HiFi) audio later this year, according to Bloomberg.