Spotify CEO Daniel Ek has once again teased the company’s long-delayed HiFi or “super premium” tier, a higher-rated subscription offering the streaming service first announced in 2021 and subsequently failed to roll out.
In the company’s third-quarter earnings call with investors on Wednesday, the executive suggested such a product is still on the way, while touting the company’s near-term developments in other areas, including an upcoming expansion of its video offering and other improved products. by AI.
The streamer first announced plans several years ago to roll out a more luxurious version of its Premium plan, which would include features like “CD quality, lossless audio” and more, but licensing issues led to delays, Ek explained out in 2022.
That didn’t stop Spotify from pitching the offering to investors in subsequent quarters. For example, in July, Ek said Spotify planned to introduce an upgraded version of its subscription plan that would cost about $17 to $18 per 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 in addition to better audio.
Since both Apple Music and Amazon Music have offered lossless audio streaming for years, it’s unclear why Spotify has held off on launching for so long. While some speculative features like AI playlists may come at a fancier level, Spotify rolled out that tool to its Premium subscribers earlier this year.
In recent months, it seemed that Spotify had expanded its focus for its luxury offering beyond just video.
Billboard reported this year that major record label UMG partnered with Spotify to create a subscription tier aimed at superfans, including things like early access to new music. The news followed Spotify’s expanded partnership with UMG, announced in March, which would provide artists with more promotional tools and improved distribution, as well as access to music videos. Additionally, an investor presentation from UMG noted that 20% of streaming subscribers would be willing to pay for a combination of early access to music, plus invitations to higher quality audio and listening parties.
Investors brought up this superfan-oriented tier again during the Q3 call, and Ek said the upcoming, more expensive tier would include better sound quality and, vaguely, “a bunch of other stuff.” He also referenced the idea that catering to superfans would be part of the season ticket draw.
“The principle for us is always the same: how do we create something that consumers love, but that also gives value back to the creators. And you can go back to vinyl buyers, you can go back to all these super fans that already exist to look for clues about what some of the things are that they value.”
However, Ek declined to discuss the role Spotify might play regarding music labels’ own efforts around “superfan” apps, saying only that if those apps generated significant consumer traction, Spotify would be “happy to look at ways to contribute to that growth’. .”
During the call, Ek also promoted the company’s creator-focused event in LA this week, where announcements will be made about the expansion of video on the platform. At the event, Spotify will introduce its efforts aimed at helping creators who want to be on more platforms access Spotify’s audience and encourage others to bring their full offerings to Spotify. This is likely related to a Bloomberg report in the fall that said Spotify was courting creators with seven-figure deals to bring their content to Spotify.
In response to questions about AI, Ek praised the success of Spotify’s AI DJ feature, which, in addition to video, had been a standout initiative that drove engagement beyond small, individual cohorts, as is the case with many of its product launches . Still, he warned that Spotify’s investments in AI would be disciplined and used to increase engagement or increase retention, rather than simply being “reckless spending.”
The company’s shares rose more than 10% Wednesday morning after the company announced it added slightly more subscribers than expected in the quarter and presented bullish forecasts for the fourth quarter. The number of monthly users reached 640 million, and the company reported an operating profit of €454 million on revenues of €4 billion, an increase of 19% compared to the same quarter last year.
