Spotify Technology has revealed that it has plans in place for a more expensive subscription tier that is set expected to include high-fidelity audio in an effort to drive more revenue and placate investors who’ve been saying the company should raise its prices.
According to the sources familiar with the strategy, the new tier called “Supremium” internally will be Spotify’s most expensive plan and likely offer a HiFi feature the company first announced it was working on in 2021. Reports say that the company delayed the product’s roll-out after two of its competitors, Apple Music and Amazon Music, began offering the feature for free as part of their standard plans. The new tier will launch this year in non-US markets first.
To supplement its current “Premium” tier, Spotify will be giving the subscribers an expanded access to audiobooks, either through a specific number of hours free per month or a specific number of titles. There will be an option to purchase more. At this point, the company only sells audiobooks a la carte through its app. Spotify is planning to introduce the feature in the US in October, after first launching in markets abroad.
Spotify has been reining in costs this year in an effort to achieve profitability but these new might be enough to drive new revenue and maintain interest in a stock that has doubled so far this year to $159.99/share. It has been competing fiercely with the rival services from Apple and Amazon.com, both of which hiked their standard plans’ prices by a dollar in the US to $10.99/month in the past year.
Spotify’s Premium plan includes access to podcasts and ad-free music listening, has been the same in the United States ever since the service launched stateside. It also offers a free version with commercials. The service costs R59.99/month in South Africa, or about 30% of what it costs in the US.
In 2022 the company increased prices in more than 40 markets but earlier this year the CEO, Daniel Ek said that the company balances pricing changes with the desire to grow subscribers.
