Spotify will launch a more expensive subscription plan that is expected to include higher-quality audio by the end of the year, likely debuting in non-US markets first, Bloomberg reported. It is projected to launch in the U.S. in October.
The “Supremium” subscription tier is aimed at driving more revenue and calming investors who want the company to raise prices, the report said, citing people familiar with the strategy.
Right now, Spotify offers plans that range from $9.99 per month for an individual to $15.99 for a “family” of up to six accounts, along with a discounted student plan for $4.99 per month. It also has a free, ad-supported tier.
The streaming and podcast service posted a wider-than-expected loss for the first three months of the year, despite a 14% increase in revenue year-over-year to $3.3 billion, and 22% growth of its user base to 515 million. Ad revenue coming in below forecasts was the main culprit for the shortfall.
Last week, Spotify slashed 200 staffers from its podcast division, or about 2% of the company’s total workforce, and said it would combine its Parcast and Gimlet groups into a “Spotify Studios” operation. The cuts followed a larger round of layoffs in January, when 6% of its global workforce, or about 600 staffers, were let go, as the company said its spending had outpaced revenue growth by double.
The new “Supremium” tier would likely offer a high-fidelity audio option that Spotify was expected to debut in 2021, but pulled back on charging for after Apple Music and Amazon Music began offering better quality sound for free, Bloomberg said.
It is also expected to include expanded access to audiobooks, either offering a set number of hours free per month or a specific number of titles, with an option to purchase more, the report said. Right now, audiobooks are sold individually on the app.
Spotify has previously made efforts to increase the amount of time that users spend on the platform, including introducing videos and redesigning its home page to include recommendations for music, podcast and audiobooks, much like TikTok and YouTube do.
Spotify declined to comment on the report to Bloomberg and did did not immediately respond to a request for additional information from TheWrap.
The company’s been in the spotlight this week as it moved to cut ties with Price Harry and Meghan Markle after a $20 million contract resulted in just one podcast series.
Spotify’s U.S.-traded shares slipped 1% early Tuesday, or $1.74, to $158.25. The stock has traded between $69/29 and $160.63 in the past 52 weeks, and has nearly doubled since the start of the year.