Spotify Technology SA, the world’s leading digital music, podcast, and video service, is planning to introduce a new premium subscription tier. The new tier is known as Supremium internally, and it will include high-fidelity (HiFi) audio, according to recent reports.
The firm intends to introduce a more expensive subscription tier for two reasons — to boost its revenue and please investors who have been saying that the firm should increase its prices.
With a new HiFi tier, the company can introduce a more pricey option for subscribers without losing those who are satisfied with the prices of the old tiers.
June 20 (Reuters) – Music streaming platform Spotify Technology (SPOT.N) is planning to roll out a more premium subscription option that is expected to include high-fidelity audio, Bloomberg News reported on Tuesday, citing people familiar with the matter.
The new tier, called…
— Daily Loud (@DailyLoud) June 20, 2023
Spotify to Introduce a New Subscriber Tier
The company has yet to officially reveal any details about the new, upcoming tier. However, some information did leak from individuals familiar with the strategy.
Sources have revealed that the upcoming tier will be the most expensive plan on the music app and likely offer a HiFi feature.
Spotify announced that it was working on something like this, although that was about two years ago, in 2021. The feature was delayed because of the fact that the app’s two largest competitors — Amazon Music and Apple Music — started offering the same feature for free.
It simply came as part of their existing plans, so Spotify seemingly felt that the time was not right.
The new tier will join Spotify’s existing 4 tiers — Individual, Duo, Family, and Student — at some point in 2023, emerging in non-US markets first.
Spotify will grant subscribers expanded access to audiobooks, although it is still unclear in what way. It is believed that this will either come through a specific number of free hours per month or a specific number of titles that users can access.
However, there will also be an option to purchase additional hours/titles. For the moment, the company is selling audiobooks a la carte. The new feature should reach the US market in October after initially emerging abroad.
The company’s spokesperson said,
At Spotify, we are constantly iterating and ideating to improve our product offering and offer value to users. But we don’t comment on speculation around possible new features and do not have anything new to share at this time.
Will The New HiFi Tier Give Spotify a Leg Up On Competitors?
The new feature might also allow Spotify to attract users of other music apps that offer HiFi, such as Tidal. It will certainly give the company a competitive edge, and it might also positively impact the firm’s shares. Recently, shares went down by 2.7%, reaching $155.73.
Spotify is already the top music streaming app by a long shot but it doesn’t always attract to the purest of audiophiles because it doesn’t offer HiFi.
After the feature is implemented, Spotify’s dominance is likely to rise even more.
However, the new changes could be enough to drive additional revenue and boost investors’ interest in the stock.
Spotify has been working around the clock to compete with major competitors like Apple and Amazon. Both companies hiked the prices of their plans by a dollar in the US, boosting them to $10.99 per month over the last year.
Meanwhile, Spotify remained at $9.99 as its basic Premium plan, which offers ad-free viewing and podcasts. In fact, the company did not change its price in the US since it launched. However, it did see certain price changes in 40 other markets.
As many likely know, Spotify has a free version featuring advertisements. Its CE, Daniel Ek, noted earlier this year that Spotify is focusing on balancing price changes with the desire to grow its subscriber base.
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