On Tuesday, Spotify Inc.
What Happened: During the call, analyst Rich Greenfield questioned why Spotify doesn't raise subscription prices more quickly in developed markets, especially when platforms like Comcast Corp's
Spotify Chief Business Officer Alex Norström responded by stressing the company's "value-to-price" approach.
We've "always put subscribers on a pedestal," he said. "We've raised prices recently and seen very strong retention ... We will use [pricing] again when we feel it's appropriate for the business."
He added that pricing decisions are made on a market-by-market basis depending on engagement levels and perceived value. "We take a portfolio approach," Norström said. "Even developed markets are different from one to the other."
Spotify CEO Daniel Ek reinforced the strategy, saying, "The biggest thing to realize as you're operating a subscriber service at scale is really managing for retention...[it's] a lot better to keep the customer around for a longer time than to lose the customer and then try to reacquire the customer."
Why It's Important: Spotify reported a second-quarter loss of $0.48 per share, missing expectations of a $2.11 profit and posted $4.75 billion in revenue-up 10% year-over-year but below the projected $4.84 billion.
Here's a comparison of the latest U.S. price hikes for individual plans across major music streaming platforms - Spotify, Apple Inc.'s
Service/ Date of Last Hike/ Old Price/ New Price
- Spotify/ June 2024/ $10.99/ $11.99
- Apple Music/ October 2022/ $9.99/ $10.99
- Amazon Music/ March 2025*/ $10.99/ $11.99
- YouTube Music/ July 2023/ $9.99/ $10.99
Price Action: On Tuesday, Spotify shares dropped sharply by 11.55% in regular trading, but edged up 0.16% after hours, according to Benzinga Pro.
Benzinga's Edge Stock Rankings show that SPOT maintains strong momentum across short, medium and long-term periods. While the stock has a solid growth score, its value rating remains relatively weak.
