Spotify blew past subscriber, user and revenue forecasts for the September quarter and said it will explore a US price increase after recent moves by Apple and YouTube.
“When our competitors are raising their prices, that is really good for us,” said founder-CEO Daniel Ek on a conference call following its latest financial report. Spotify has the lowest churn among its peers, he said, and offers “a great customer value proposition.” He said the music streamer has launched dozens of price increase in markets around the world with great results.
Price hikes just announced by Apple include a dollar increase for Apple Music for individuals to $10.99 a month, with the family plan jumping two dollars to $16.99 per month. Apple One, which bundles video and music streaming with cloud services, video games and other options is rising to $16.95 a month from $14.95 for individuals. Families will pay three dollars more, at $22.95 a month.
YouTube is raising the price of its US Premium Family Plan to $22.99 from $17.99.
A US price increase “is one of the things we would like to do and it’s something we will [consider] with our label partners. I feel good about this upcoming year, and what it means about pricing for our service,” Ek said.
The company’s third quarter mostly beat expectations with 456 million monthly active users and 195 paid subscribers. Revenue reached 3 billion euros ($3 billion), up 21% from the year-earlier quarter. But heavy investment and slower ad growth – still a small part of overall revenue – nipped margins. Shares fell more than 5% after market close.