Spotify

Spotify’s COVID-19 rocket fuel

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New data (which may be unsurprising to many) reveals just how much the pandemic accelerated subscriber growth for Spotify over the past year.

Guest post by Chris Castle of Music Technology Policy

In 2020, we believe the pandemic had little impact on our subscriber growth and may have actually contributed positively to pulling forward new signups.

Ya think? Spotify has outpaced the growth of all other FAANG stocks as seen from this chart:

WIPO SPOT Compoarison 2-7-21

Yes, Spotify’s financial results had some bombshells, not the least of which was the corporate communications dance around the truth: COVID was rocket fuel for Spotify’s subscriber growth despite Daniel Ek’s best efforts to keep the price down (and therefore the revenue share royalty) in order to stimulate growth in valuation and therefore the share price (that he does not share with the artists who drive his valuation).

But prices are gradually increasing for the Family Plan.

In October, we raised the price of the Family Plan in 7 markets (Australia, Belgium, Switzerland, Bolivia, Peru, Ecuador, and Colombia) alongside Duo in Colombia. Early results of the price increases have been highly encouraging, as we have seen no meaningful impacts to churn or customer intake in these markets. On February 1, we announced Family Plan price increases across an additional 25 markets (8 in Latin America, 12 in Europe, 4 in Rest of World and Canada in North America), including full portfolio price increases in Sweden, Norway, Finland, and Iceland.

If you were going to increase prices, the time to do it would be during a global pandemic–called price gouging in some attorney general offices.

So let’s not hear any more about how much Spotify’s royalty expense is. They could easily increase their royalty, pay a bonus or pay equitable remuneration. Where would they get the money? The same place they get the money to pay their absurd overhead costs.

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