In an update to Spotify’s recent pricing tests in Scandinavian countries, Paul Vogel, Spotify’s head of financial planning and investor relations, said at Goldman Sachs’ annual Communacopia Conference that Spotify is “not yet at a point where you have stickiness globally.”
The Swedish music streaming service is more interested in “growing users and subscribers and bringing more and more value into the ecosystem, which is essentially lowering pricing,” Vogel said.
He added that while the Scandinavian tests have yielded positive results, they are not to be taken as a signal of Spotify’s global plans because they reflect conditions in one particular market. “That’s not to say we wouldn’t test other markets, but our main focus is on growing the top of the funnel: users and subscribers,” he said.
Spotify is aware of users taking advantage of its price-friendly family plan, which allows six users to share a $14.99-a-month subscription. “It’s shocking how many six-member families there are out there,” Vogel remarked. “We know it gets people into using the product, and eventually they’re going to graduate away from the family plan.”
Since going public 2018, Spotify has faced increasing pressure to turn a profit. Artists and record-industry executives are also pushing for more aggressive pricing, especially amid a new round of licensing negotiations.
CEO Daniel Ek defended the service’s low subscription fee in April noting that music-streaming subscriptions have to compete with radio’s accessibility and YouTube’s “entire archive of music that you can listen to entirely for free.”
Source: Rolling Stone