It looks like Spotify doesn’t plan to increase its subscription prices anytime soon.
This week, Spotify’s Chief Legal Officer Horacio Gutierrez revealed the real reason why the company doesn’t want to increase prices despite the possible benefits to artists’ income.
Unlike many other streaming platforms out there, Spotify has avoided frequent subscription price hikes over the years. Earlier this week, Spotify’s co-founder Daniel Ek told the Financial Times that the company is being very careful during the COVID-19 pandemic. Ultimately, Ek says that Spotify doesn’t want to get to “get ahead of the market” and quickly raise subscription prices.
Now, Spotify’s Chief Legal Officer Horacio Gutierrez has further elaborated on this decision. During a recent inquiry with the Digital, Culture, Media and Sport select committee (DCMS), Gutierrez stated that Spotify does not want to raise its current monthly premium subscription fee of $9.99.
Why? Well, the company is worried the increase could turn users towards online music piracy. As well, Spotify is wary of new prices becoming “unaffordable to consumers” despite the benefits it could have for artists.
The DCMS inquiry was established back in 2020 in an effort to investigate if streaming platforms pay artists fairly. Along with Spotify, Apple Music, Amazon Music and YouTube were present for the hearing. Ultimately, the platforms agreed new ways of artists’ earning money for streams should be explored.
During the hearing, Gutierrez said Spotify would “definitely be open to looking for alternative models and considering them.” Meanwhile, Amazon Music’s Paul Firth said, “We should take a look at a number of these approaches” to find out what benefits artists most.
Although Spotify is hesitant to raise its subscription prices, the platform is launching a whole new tier. This week, during the Stream On event, Spotify announced that it’s launching a new tier called HiFi which will offer “CD-quality, lossless audio.”
According to Cnet, Spotify HiFi is expected to arrive in select markets later this year before becoming available in over 80 countries. As well, it’s estimated the new tier will cost around $20 a month in the United States.
— Spotify (@Spotify) February 22, 2021
What are your reactions to the Spotify HiFi tier? Are you surprised by the reason Spotify doesn’t want to increase subscription prices? Let us know in the comments below.