Forgive me for the misty eyes; I’m overcome with nostalgia.
MBW is busy making a magazine to celebrate our 10th anniversary – MBW10 – and I’ve spent the last few days putting the finishing touches to it.
It’s a year-by-year retrospective of some of the most eye-popping news to hit the music industry over the past decade, and it’ll be out with you fine MBW+ subscribers soon.
My favorite oh-my-God-did-that-really-happen item: The 2015 TIDAL conference where music megastars lined up like The Avengers to sign a declaration of nothing-in-particular. And Alicia Keys said: “This is for the people by the people, you know?”
Crazy times. Anyway, said magazine has sent me flicking through the MBW archives to revisit our earliest interviews, from January 2015.
One MBW Q&A published that month was with Jonathan Forster, who’d recently moved from his role as MD of The Nordics at Spotify to become the company’s head of sales in EMEA.
For context: at this point, Spotify had 60 million active users, with 15 million paying subscribers. Today, it has approximately 12 times that volume of users… and 19 times (!) that volume of subs.
I asked Jonathan at least one prescient question: “Some people seem to assume the reason you don’t have more price tiers is because you haven’t thought of it. That can’t be the truth, right?”
He responded that Spotify was well aware of multi-tiered pricing options, thank you very much, but wanted to “10-X” its business before “noodling around optimizing what we can squeeze out of people in Stockholm”.
Today (November 13), having 10-X’d and then some, Spotify finally began noodling. Not in Stockholm, but in India, South Africa, UAE, Indonesia, and Saudi Arabia.
The company just launched ‘Premium Platinum’ in these markets – a tier priced at more than double the previous standard subscription that gates lossless audio, AI DJ features, and mixing tools behind a velvet rope.
Spotify is playing down this move as a mere ‘pilot’ – a hands-off experiment in a smattering of commercially non-essential territories.
But we all know where this ends. When Spotify’s ‘pilot’ inevitably lands in North America – and it will – the financial implications are staggering.
Spotify has approximately 70 million paying subscribers in the US and Canada today, likely at around a USD $6 monthly ARPU.
If 20% of these subs eventually upgrade to a doubled-price VIP tier, that’s an extra $1 billion in annual revenue – the bulk of which will be shared with music rightsholders.
This isn’t just wishful thinking.
In China, Tencent Music already has 15 million ‘SVIP’ subscribers paying 5x more for HD audio and other benefits – over 12% of its subscriber base.
For years, Universal, Sony, and Warner bit their tongues as Spotify clung to its $9.99 monthly price point like a life raft.
When the platform finally raised prices for the first time in 2023, the majors exhaled. Now, with ‘Premium Platinum’, they can practically taste the upside.
Music Business Worldwide
