Unless you have been living under a rock, you have probably heard about the fact that Spotify is raising prices for its paid subscribers. According to a recent article in the New York Times, the music streaming service will be raising the price of its subscriptions for the first time in years. This will benefit both the labels and the artists who have worked to create the music.
Price hikes will benefit label partners and artists
Despite the fact that Spotify has yet to become profitable, it still rakes in the lion’s share of the audio streaming subscription business. As of May of this year, the Swedish service has 31% of the market, and is currently ahead of competitors such as Amazon Music, Apple Music, and YouTube Music.
One of the most successful things Spotify has done is to change the way artists are compensated for their efforts. Spotify has partnered with the big music labels, and pay them individually to play their songs on the service. It has also partnered with artists distributors to give them instant access to Spotify’s catalogue.
Spotify has even incorporated video elements into their platform to keep users glued to their devices. Spotify’s premium version is ad-free and offers users the ability to skip ahead, play any song on demand, and even listen to their playlists offline.
Spotify also has an impressive suite of podcast offerings. Currently, Spotify has over 4.7 million podcasts available to its users. It has a well-developed algorithm to suggest playlists based on the user’s listening history.
Among other things, Spotify reportedly paid out EUR4bn in music rights monies last year. Spotify has also introduced a new way to store your music data in the form of a decentralized network. In addition, Spotify has done its part to promote the music industry by naming and showcasing the best albums, songs, and albums of the year.
Spotify’s Q3 results released this week reveal a bit more about the business than you may have expected. In particular, Spotify’s ad-supported revenue grew by double digits year over year. In fact, Spotify’s gross margin is now 24.7%, the highest it’s been in years.
New plans will look more attractive for Apple Music subscribers
Streaming music service Spotify is raising prices. Although it’s not clear if these price hikes are planned or expected, it’s certainly not out of the question. In fact, there are rumors that the company is going to offer an extra tier for an extra fee.
The price increases are being attributed to the strength of the US dollar. As such, they are not likely to affect all plans. The biggest question is whether customers will be willing to pay them. In any case, Spotify’s subscriptions have been well-received.
Spotify’s latest quarterly results show the company increased both revenue and users. The company also introduced Replay, a feature that resurfaces the most-played tracks throughout the year. It’s also worth noting that Spotify has added some video elements to its app to keep users engaged.
There are also some perks to being a premium subscriber. For one, you can download a large number of songs for offline playback. You can also share playlists with your friends. Also, you can publish your listening history to Facebook and follow friends who are also subscribers.
Spotify is also rumored to be working on a platinum tier that will feature a number of other perks. For example, it will include limited advertisements on podcasts. And, if you pay more than $19 a month, you’ll also receive access to the company’s HiFi service.
Spotify may not have the most extensive library of music, but its recommendation engine is top-notch. It also supports a number of devices, including Xbox and Roku. And, its iOS and Android integration makes it compatible with a wide range of mobile phones.
The company’s new 24/7 music video station is similar to old-school MTV. You can also watch video premieres and chart countdowns.
Growth in the third quarter of 2021
During the third quarter of 2021, the United States’ economic growth slowed from the second quarter’s 6.7% rate to 2.1%. The United Kingdom and Italy reported growth rates of 1.3% and 2.6%, respectively. The OECD area’s GDP grew by 0.5% during the same period.
The United States economy was restrained by the continued impact of coronavirus infections and a fading federal stimulus spending. The economy also suffered from shortages of motor vehicles. Despite these factors, the underlying strength of the U.S. economy remains strong as households remain optimistic about the labor market and consumer confidence is strong.
The economy was also restrained by the recent resurgence of coronavirus infections. However, the economy is expected to strengthen in the fourth quarter of 2021. The increase in consumer confidence is expected to support growth. Consumers are planning to buy more big-ticket items such as home ownership and motor vehicles in the next six months.
The OECD area’s GDP was above the pre-pandemic level in the third quarter of 2021. Real gross domestic product grew at a rate of 1.3%. This was driven by a strong home ownership transfer cost and an accumulation of inventories. In addition, real gross output includes sales to other industries.
Real gross output increased in 14 of 22 industry groups, led by government, professional, scientific and technical services, and accommodation and food services. However, goods-producing industries fell by 5.5%. Higher discounting and a less favorable market mix also weighed on the development of the gross margin.
Revenues increased in the third quarter of 2021, driven by higher net unit growth and international same store sales. In addition, higher global franchise revenues contributed to higher income from operations.
Growing its content library
During the past two years, Spotify has made it easier for users to search for songs. They have also changed the way artists are ranked in search results. It has made artists’ songs discoverable to millions of users in 61 countries.
Spotify is in a highly competitive market. The company faces off with tech behemoths such as Alphabet, Amazon, and Facebook. The company is also a rival to Apple Music.
Spotify is currently generating 90% of its revenue from premium subscribers. Despite this, the company is still unprofitable. It continues to make strategic acquisitions, improve its platform, and diversify its content sources. This will help it attract more users and generate more ad revenue. It has also introduced ad-free access to 4 million podcast titles.
Spotify is building a two-sided marketplace where creators and fans can interact. The company has over 200 petabytes of data that it uses to serve up personalized recommendations. Users can search for music, podcasts, and audiobooks. They can also browse by genre, artist, and album. Its search also includes a filter function. It works like a Google search engine.
Spotify’s premium subscription costs $16 per month for up to six users. The company also offers a discounted student rate of $5. Its Premium tier also includes ad-free access to 80 million tracks.
In April 2021, Spotify will expand its Library feature to include a collection of more than 70 million songs. This will increase the company’s content library and give it more room to raise its premium subscription prices in the future.
Streaming music is one of the fastest-growing parts of the market. Spotify has a large user base and a captive audience.
Pirated content
Despite the success of Spotify and Apple Music, music piracy is still increasing in the U.S., a recent study suggests. The report, released by IFPI, shows that more than a third of consumers are still pirating music.
It also points out that many people who consider themselves pirates are actually using someone else’s Netflix account, which is facilitating piracy. And it’s a trend that is being seen in many African countries.
Despite these efforts, music piracy is still a major concern for record labels and the record industry. This has led to companies like Netflix and Apple launching services to address the problem.
Spotify has launched an information portal, called SpotifyArtists, to help artists and musicians understand what they’re getting into with their service. According to the company, their free tier offers a better experience than The Pirate Bay and other streaming services, while also bringing people into a legal framework.
Spotify has recently secured $250 million in funding. This will help the company fight fake streams, which generate revenue illegally.
Despite its efforts to combat piracy, Spotify is raising prices. Spotify has been offering a free service, but recently plans to increase its monthly subscription fee by $5.
According to MUSO’s 2017 Global Piracy Report, music piracy sites accounted for 73.9 billion visits worldwide in 2016. The company also estimates that 32% of music piracy is caused by stream-ripping.
This figure is higher than what a study found in the UK. Its data shows that the number of stream-rippers in the UK increased from 15 million in 2017 to 17 million in 2018.
Stream-ripping sites also make up more than 90 percent of the 50 most popular music-only infringing piracy sites in the UK. This means that piracy sites are making a comeback, and are steadily shifting towards larger bandwidth videos.
