Spotify CEO Daniel Ek announced the company's long-delayed HiFi or “Super Premium” tier, a high-quality streaming service that was first announced in 2021 and has since failed to roll out. Subscription teased again.
During the company's third-quarter earnings call with investors on Wednesday, the executive hinted that such a product is still in development, but said the company has plans to expand its video offering and other product enhancements in the future. It touted the company's short-term progress in other areas. By AI.
The streamer first announced plans a few years ago to roll out a more deluxe version of its premium subscription, including features like “CD-quality, lossless audio,” but licensing issues caused delays and it will not be rolled out until 2022. Ek explained.
That didn't stop Spotify from launching the offering to investors in subsequent quarters. For example, Ek said in July that Spotify was planning to introduce an upgraded version of its subscription that would cost about $17 to $18 a month, or about $5 more than the current premium tier. At the time, he noted that the plan would give users more control over their music, as well as better audio quality.
Apple Music and Amazon Music have both offered lossless audio streaming for years, so it's unclear why Spotify delayed launching the service for so long. There has been speculation that some features, such as AI playlists, will ship with more deluxe tiers, but Spotify instead rolled out that tool to premium members earlier this year.
In recent months, Spotify has appeared to expand its deluxe service beyond video.
Earlier this year, Billboard reported that major record label UMG is working with Spotify to create a subscription tier for superfans, which could include early access to new music. . The news follows an expanded partnership between Spotify and UMG announced in March that will provide artists with more promotional tools, improved distribution and access to music videos. Additionally, in UMG's investor presentation, 20% of streaming subscribers said they were willing to pay for early access to music, combined with high-quality audio and an invitation to a listening party.
Investors on the third-quarter conference call revisited this superfan-focused demographic, but Ek said future higher-priced segments would include better sound quality and vaguely “other It will include “features''. He also mentioned the idea that catering to superfans will also be part of the subscription's appeal.
“The principles for us have always been the same: how do we create something that consumers love, but that also provides value to creators and to record buyers? You can also go back and look at all the superfans that are already there and look for clues about what they value.”
But Ek declined to say what role Spotify might play in music labels' own efforts around “superfan” apps, saying that if those apps create significant appeal for consumers. If so, Spotify said only that it would be “happy to consider ways to contribute to that growth.” ”
During the conference call, Ek also touted the company's creator-focused event in Los Angeles this week. The event will also include announcements about expanding video on the platform. With this event, Spotify aims to help creators who want to be available on more platforms access Spotify's audience, as well as encourage other creators to bring their entire service to Spotify. We would like to introduce our efforts. This is likely related to a Bloomberg report in the fall that Spotify was courting video creators with seven-figure deals to provide content to Spotify.
In response to a question about AI, Ek touted the success of Spotify's AI DJ feature. This feature, along with video, was a standout effort to drive engagement that grew beyond the small individual audience that many product launches have. Still, he cautioned that Spotify's AI investments will be made with discipline and will be used to drive engagement and improve retention, rather than just “reckless spending.”
The company's stock rose more than 10% Wednesday morning after the company announced slightly better-than-expected subscriber numbers for the quarter and gave a bullish outlook for the fourth quarter. With more than 640 million monthly users, the company reported sales of 4 billion euros and operating profit of 454 million euros, an increase of 19% year-on-year.