Spotify Technology SA (NYSE:SPOT) has hinted at increasing its prices as it focuses on expanding its user base and introducing new features.
Spotify Growth Push Backed By "Stickiness,” New Services Besides Price Hikes
Alex Norström, the co-president and chief business officer at Spotify, revealed the company’s plans for price hikes in an interview with the Financial Times. This strategy is part of the company’s “efforts toolbox” to boost profitability, which it achieved for the first time in 2024.
Spotify has been increasing its prices for the past two years and has seen a positive response from investors. The company announced a further increase in premium subscription prices in select markets from September 2025.
Despite the price hikes, Spotify’s subscriber numbers have increased by 12% to 276 million, and its monthly active users have risen by 11% to 696 million, surpassing expectations. Norström believes that there is still significant potential for subscriber growth, with the company aiming to reach over one billion users.
"Over a quarter of a billion subscribers are currently paying us every month and just using us more and more,” stated Norström.
Spotify plans to introduce new services and features to accompany the price increases, with a focus on providing more value and “stickiness” for its subscribers. The company is broadening its range with audiobooks and podcasts while also developing a new subscription tier designed for devoted music fans.
Profitability Concerns Linger Amid Price Hikes
Spotify’s decision to raise prices comes in the wake of its ongoing efforts to enhance its premium offerings and drive user engagement. Just last week, the company introduced a new playlist-mixing feature for its Premium subscribers, allowing them to customize transitions between tracks. This move was seen as a way to add value to the premium subscription and encourage more user engagement.
The company beat expectations with strong user growth in its Q2 earnings: MAUs rose by 18 million QoQ to 696 million (7 million above guidance), while premium subscribers grew 12% YoY to 276 million, exceeding forecasts by 3 million with gains across all regions.
Despite its impressive user base growth, Spotify has been facing concerns about its profitability. The company’s Q2 results showed a significant miss on earnings per share and revenue, leading to a decline in its stock price. The recent price hikes and focus on profitability indicate Spotify’s determination to address these concerns and continue its growth trajectory.
Benzinga's Edge Rankings place Spotify in the 92nd percentile for momentum and the 95th percentile for growth, reflecting its strong performance in both areas. Check the detailed report here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
