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· Posted on
February 21, 2024

Spotify has rolled out an unpopular solution to its second-quarter blues.. and this is NOT music to my ears

Spotify is hiking the cost of its paid subscription plans for the first time since 2011.

What's the key learning?

  • While Spotify's active users jumped 27% year on year, its net loss jumped to over 300 million euro.
  • It's fair to say that the days of lengthy free trials and extra-low prices are pretty much all over red rover.
  • Many streaming services are still not making a profit, and so they are now looking for ways to limit their continuously-widening losses.

👉 Background: Spotify is the streaming company that shook up the music industry in the late 2000's... the same company that pays most artists less than half a cent per stream.

👉 What happened: After years of strong growth, Spotify released its second-quarter results...  while active users jumped 27% year on year, its net loss jumped to over 300 million euro.  Yikes.

👉 What else: To solve this problem, Spotify is hiking the cost of its paid subscription plans for the first time since 2011 - and this includes Australian subscribers. So it's fair to say that the days of lengthy free trials and extra-low prices are pretty much all over red rover.

What's the key learning?

💡Streamers appear to have ended their era of generosity. It's been more than 10 years for many of these streaming services, and many are still not making a profit.

💡Cases in point:

  • Paramount+ made a $511m USD loss during the first quarter
  • Disney+ made an operating loss of $659 million USD during the second quarter
  • And of course, Spotify.

💡Streaming companies are now looking for ways to limit their continuously-widening losses. This means cutting staff and reducing the volume of content that they produce. But also... it means raising streaming prices.

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