Spotify will introduce a more expensive subscription for music lovers

Spotify Technology SA is expected to introduce a higher-priced Premium Plan for its most loyal users in the second half of this year, according a source familiar with the plan.

The person said that users will pay at least US$5 per month (RM23) for better audio, new tools to create playlists and manage their song libraries and for better audio.

Spotify will offer this option to existing customers as an upgrade. Most users will continue to use their existing Spotify plans. However, those who upgrade will bring in additional revenue for Spotify and its partners.

The new pricing tier will vary based on the base plan of each user, but the average will be about 40%, according to the person who declined to be named because they were not authorised to discuss the matter. Bloomberg News reported last year on the plan, which was internally called “Supremium”.

Early trading in New York saw the shares rise 2.9%.

Upgraded subscribers will also have access to high-fidelity sound. Spotify announced the HiFi audio feature back in February 2021 but has delayed its rollout. Since then, other competitors such as Apple Music and Amazon Music have begun offering higher-quality music with their standard plans.

Spotify now offers different price points depending on the type of user.

Spotify users have seen price increases around the globe. The company announced just last week that it would increase prices in the US in July by US$1 per month (RM4.72), bringing the standard paid tier to US$11.99 a month (RM56). The subscription price was raised to US$10.99 per month (RM51), from US$9.99 per month (RM47), after more than ten years of not changing.

Spotify’s premium plan would generate additional revenue of hundreds of millions, which it would share with the music rights holders. It’s not clear how many people would be willing to increase their subscription for tools like playlisting and higher-fidelity audio.

Subscribers of the new tier can also instantly create custom playlists based on certain activities, dates, and times throughout the year. The playlists are designed to learn from each user’s behavior and develop playlists automatically. Bloomberg

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