Spotify Technology SA is set to introduce a new, higher-priced premium plan later this year for its most dedicated users.
Dubbed the Premium Plus Plan, this upgrade will cost users at least $5 more per month and provide access to high-fidelity audio and advanced playlist management tools, according to a source familiar with the matter.
The new tier, which Spotify plans to position as an add-on for existing subscribers, aims to offer an enhanced user experience without disrupting the current pricing structure for most users.
This move is expected to generate additional revenue for the company and its business partners. The pricing for this new tier will vary based on the user’s base plan but will average a 40% increase, the source said.
Among the notable features of the Premium Plus Plan is access to HiFi audio. Spotify announced its HiFi audio feature in February 2021 but postponed its rollout.
Since then, competitors such as Amazon Music and Apple Music have included higher-quality audio in their standard plans, prompting Spotify to enhance its offerings.
In addition to superior audio quality, Premium Plus subscribers will benefit from new tools for creating and managing playlists.
These tools will enable users to generate custom playlists for specific activities, dates, and times, which will adapt to individual listening habits and eventually develop personalized playlists without user prompts.
This latest development follows a series of price increases for Spotify users worldwide. Last week, Spotify announced a $1 monthly price hike in the US, raising the cost of its standard paid tier to $11.99 per month.
This increase follows a previous hike from $9.99 to $10.99 per month last year, marking the first adjustment in over a decade.
For Spotify, the Premium Plus Plan represents an opportunity to diversify its pricing strategy and create multiple price points for different types of users.
By offering advanced features at a higher price, the company aims to attract power users and audiophiles who are willing to pay more for an elevated listening experience.
The additional revenue generated from the Premium Plus Plan is expected to be substantial, with potential hundreds of millions of dollars in extra income to be shared with music rights holders.
However, it remains to be seen how many users will opt for the upgrade, given that high-quality audio has not significantly boosted subscriptions for other services.
