Universal Music Group (UMG) and Spotify are in advanced discussions about a special, high-priced version of Spotify. This premium tier would offer a better user experience for music fans. Spotify CEO Daniel Ek announced earlier this year that the premium tier would likely cost between $17 and $18 per month. It would offer more control and better sound quality.
UMG and other music companies are looking for ways to make more money from serious music fans. Streaming services have mostly focused on getting more people to sign up for cheaper plans. Universal’s CFO, Boyd Muir, said “Superfans, the most avid 20%-30% of all music listeners, once drove over 70% of recorded music spending. Streaming monetizes them, but not nearly as well as in the past“.
As a sort of evidence, Tencent Music Entertainment in China already offers a premium tier that costs five times more than the regular version. Many users have signed up for this tier, therefore UMG argues even more people would be willing to pay more for a better music experience.
Spotify has been considering the idea of a superfan tier for several years. The company first announced plans for a high-end tier called HiFi in 2021, but it was delayed the following year. Despite the delay, Spotify has continued to explore ways to offer a premium listening experience for its most dedicated users.
In addition to enhanced audio quality and greater control, the superfan tier could offer other exclusive benefits, such as early access to new music, ad-free listening, and personalized recommendations. By providing a more premium experience, Spotify aims to attract and retain its most valuable customers and generate additional revenue.
[H/T] Billboard
