In the case of Argentina, the adjustment will be around 33%. In the case of the family premium subscription, it will go from $489 per month to $649 per month. Strictly speaking, the values will be higher for the Argentine consumer since these do not include taxes. Because the value at which credit cards are invoiced is $850 final. Thus, those $649 will be $1,122.
Its competitor, YouTube music, had already updated the values in November 2022. The price increased 226%, since it went from $119 to $389, in the case of a cheaper subscription to the premium service.
The increase in Spotify’s service was decided shortly after Ek announced a 6% cut in its workforce as a measure to alleviate the enormous red in its accounts. Equivalent to about 600 people.
In his argument to justify the layoffs, Ek wrote: “In 2022, Spotify’s operating expense growth was double our revenue growth. In hindsight, I was too ambitious to invest before our revenue growth.”
Market analysts judge that Daniel Ek’s business philosophy was the great determinant of the company’s poor results, which continues to lose more and more money despite having reached 205 million paid subscribers. They first point out that he spent an enormous amount of money on personnel, sales and marketing; second, he poured too much money (more than $1.1 billion) into Spotify’s podcasting strategy, even though it hasn’t been profitable. And finally, they point out that Ek has refused to raise the price of the subscription service in its biggest market, music streaming, even once in the last 12 years.
With this increase, analysts project that it will be able to recover ground in the first quarter of 2023, since the revenues of the last quarter of 2022 were very good. Spotify also expects to reach 207 million premium subscribers in the current quarter and revenue of 3.1 billion euros (3.35 billion dollars).
Analysts expected 202 million subscribers and revenue of 3,050 million euros.
Source: Ambito
