Spotify appoints Christian Luiga as its new CFO
Spotify has announced the appointment of Christian Luiga as its new chief financial officer. Currently serving as CFO and deputy CEO at Saab, a European defense and security firm, Luiga is expected to join the streaming service in the third quarter of this year. In the interim period, Ben Kung, Spotify's VP of financial planning and analysis, will temporarily assume the role of CFO.
Preparations for second subscription price increase
As Spotify gears up for a leadership change, it is also reportedly preparing to raise its premium subscription prices for the second time since last July. The expected increase is projected to be between $1 to $2 per month by the end of April in several markets, including the UK and Australia. Insiders suggest that similar price hikes are anticipated in the US later this year. As of now, there is no information available regarding pricing changes in India.
Growth remains unaffected by previous price increase
Despite the first price increase in 12 years implemented in 2023, Spotify experienced its most significant user growth last year. The platform welcomed 113 million new users to its free and paid services, defying concerns of potential subscriber losses due to higher prices. As of the end of last year, Spotify had 236 million premium subscribers and 602 million monthly active users.
Financial performance and strategy for profitability
Despite its impressive user base, Spotify's financial performance has been less than stellar since it went public in 2018. The company is yet to post profits. The forthcoming price increases are part of Spotify's strategy to achieve long-term profitability. In addition to raising prices, the company plans to introduce a new basic tier that will provide music and podcasts at the current $11 monthly rate of an individual premium plan.
Spotify's new basic tier and potential 'Supremium' plan
Spotify's new basic tier will exclude audiobooks, and users will need to pay for them separately. The company is also contemplating other pricing options, such as a "Supremium" plan offering high-fidelity audio at a slightly higher price. However, the timeline for the availability of high-fidelity audio streaming is yet to be confirmed by Spotify. The feature has been in the works for approximately two years now.
