Spotify Technology (NYSE:SPOT) gained on Monday after the company announced a price hike for its premium subscription in various regions.
The company shared plans to increase premium subscription prices across multiple markets to support continued innovation and deliver a top-tier, personalized user experience.
Over the next month, Premium users in regions including South Asia, the Middle East, Africa, Europe, Latin America, and Asia-Pacific will receive emails outlining the changes to their plans.
Also Read: Spotify’s Subscriber Boom Can’t Hide Ad Woes: Analyst
Spotify’s past price increases and recent cost-cutting efforts helped the company achieve its first annual profit in 2024, Reuters reported on Monday. However, it projected that third-quarter profit would be below analysts’ expectations, citing higher employee-related taxes that would offset the strong demand for music streaming. In the second quarter, Spotify reported monthly active users and premium subscribers.
The company also gained an edge after Apple (NASDAQ:AAPL) approved its U.S. app update, allowing subscription price displays and external payment links—following a court ruling that barred Apple from charging commissions on off-app purchases, as per Reuters. CEO Daniel Ek said the update led to a noticeable increase in user engagement in the U.S. He expects similar regulatory changes in Europe and the UK to further benefit Spotify and other app developers.
To attract more subscribers, Spotify has been expanding its video content through its Partner Program, which helps podcast creators monetize their work. Ek noted a rising number of creators joining the program, driving a substantial increase in video content on the platform.
Interestingly, last week, Spotify CEO Daniel Ek emphasized that the company prioritizes long-term subscriber retention when making pricing decisions. Speaking on Spotify’s second-quarter 2025 earnings call, Ek said managing for retention is more valuable than risking churn through aggressive price hikes and then having to reacquire lost users.
Chief Business Officer Alex Norström added that Spotify has a value-to-price strategy, tailoring price changes to each market based on engagement and perceived value. He noted that recent price increases have demonstrated strong retention and confirmed that the company will continue to adjust prices when they align with its broader business goals.
Spotify stock gained over 50% year-to-date despite failing to reach its EPS consensus estimates in at least the last four quarters and its revenue estimate for the previous quarter.
Price Action: SPOT stock traded higher by over 6.4% to $667.49 at last check on Monday.
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