Spotify is set to introduce a more expensive premium plan later this year, targeting its most dedicated users.
This new plan will cost an additional $5 per month and promises a range of enhanced features, including superior audio quality and advanced tools for playlist creation and library management.
Spotify announces a new premium plan with improved audio quality, advanced playlist tools, and personalized playlists, following recent price hikes.STEFANI REYNOLDS/AFP via Getty Images
Spotify's New Premium Plan
According to a report by Bloomberg News, this new premium tier, dubbed "Supremium" internally, will be available as an add-on for existing users.
This means that while the majority of Spotify's user base will continue with their current plans, those opting for the upgrade will experience significant improvements.
The cost of this new plan will vary depending on the user's existing subscription, but it is expected to average out to about a 40% markup.
What's the New Features?
One of the standout features of the new plan is access to Spotify's high-fidelity (HiFi) audio. Spotify initially announced the HiFi audio feature in February 2021, aiming to allow premium subscribers in select markets to upgrade their sound quality.
However, the rollout was delayed, making this upcoming release highly anticipated. The upgraded audio quality will put Spotify on par with competitors like Amazon Music and Apple Music, which already offer higher-quality audio as part of their standard plans.
In addition to better audio, the new premium tier will provide users with advanced tools for creating playlists and managing their song libraries. These tools are designed to enhance the user experience, making it easier to organize and enjoy music collections.
Subscribers will also have the ability to generate custom playlists tailored to specific activities, dates, and times. These playlists will adapt to each user's behavior, eventually developing playlists without any prompting.
This move by Spotify follows a series of recent price hikes aimed at boosting margins.
Just last week, the company raised prices for its premium plans in the United States by $1 per month, bringing the standard paid tier up to $11.99. Previously, the subscription price had increased from $9.99 to $10.99 after remaining unchanged for over a decade.
The introduction of the new premium plan is expected to generate substantial additional revenue for Spotify. Analysts suggest that it could bring in hundreds of millions of dollars, which would then be shared with music rights holders.
However, it remains to be seen how many users will opt for the higher-cost subscription, especially considering that high-quality audio has not significantly boosted other services.
Reuters reports that Spotify's announcement of the new plan has already had a positive impact on its stock, with shares rising nearly 1% in early US trading following the news. The company's premium subscriber base has also been growing steadily.
