Spotify Prepares for Further Price Increases Amid New Service Rollout

Spotify is signaling further price rises as it rolls out new services, including a new subscription tier. The company is set to introduce a new ad-free option for existing users, which will likely come with a higher price tag. Spotify's premium subscription already offers features such as unlimited skips, offline listening, and ad-free listening. The new services and potential price hike could impact the company's user base and revenue.

Spotify is signaling further price rises as it rolls out new services, including a new subscription tier. The company is set to introduce a new ad-free option for existing users, which will likely come with a higher price tag. Spotify's premium subscription already offers features such as unlimited skips, offline listening, and ad-free listening. The new services and potential price hike could impact the company's user base and revenue.

The latest price increase for Spotify's premium subscriptions is expected to take effect in September. Premium subscriptions are set to rise from $13.99 per month to $15.99 monthly [1]. This follows a series of recent price hikes announced by Spotify in various European markets, with price increases ranging from 8% to 22% across different subscription plans [2].

Spotify has also announced plans to introduce a new ad-free option for existing users, which will likely come with a higher price tag. The new service is expected to be rolled out in the coming months and will offer an ad-free listening experience for a higher monthly fee. The exact price for the new ad-free option has not been disclosed yet, but it is expected to be higher than the current premium subscription price.

The price hikes and introduction of new services could impact Spotify's user base and revenue. According to a study by Westpac, three in ten Australians admit they are losing up to $600 annually on duplicate services and platforms they no longer use [1]. The price hikes and new services could lead to a decrease in user retention and an increase in subscription cancellations.

Investment analysts have also expressed their views on the potential impact of the price hikes on Spotify's stock price. Oppenheimer has raised its price target on Spotify to $825 from $750, while maintaining an "Outperform" rating [2]. Guggenheim has also raised its price target on Spotify to $850 from $800, while maintaining a Buy rating [2]. Both analysts have noted that the price increases are likely to be "gross margin accretive" for Spotify, meaning they could lead to an increase in the company's profit margins.

The introduction of new services and price hikes could also lead to an increase in competition for Spotify. Competitors such as Apple Music, Amazon Music, and Tidal have been actively promoting their services and offering competitive pricing to attract new users. The price hikes and introduction of new services by Spotify could lead to a shift in user preferences and a decrease in market share for the company.

In conclusion, Spotify's signaling of further price rises and the introduction of new services could have a significant impact on the company's user base and revenue. The price hikes and new services could lead to a decrease in user retention and an increase in subscription cancellations. Investment analysts have expressed their views on the potential impact of the price hikes on Spotify's stock price, with both Oppenheimer and Guggenheim raising their price targets on the company. The introduction of new services and price hikes could also lead to an increase in competition for Spotify, potentially leading to a shift in user preferences and a decrease in market share.

References:
[1] https://www.moneymag.com.au/spotify-to-follow-netflix-with-new-subscription-price-hike
[2] https://www.ainvest.com/news/spotify-technology-spot-receives-analyst-target-price-825-00-oppenheimer-maintaining-outperform-rating-2508/