Spotify has lengthy been criticized for its lack of high-fidelity audio.
One of many firm’s staunchest critics of its audio high quality is Neil YoungerIn March this 12 months, when he introduced that his music was returning to Spotify after two years, he known as the platform “the world’s primary low-resolution music streaming media.”
In what’s now a largely homogeneous streaming atmosphere, the place platforms look comparable and supply the identical catalogue, the supply of HiFi audio has been a key differentiating characteristic for Spotify’s bigger rivals.
For instance, Apple Music launched lossless audio and spatial audio supporting Dolby Atmos in its service without spending a dime in Could 2021.
In the identical month, Amazon Music additionally launched a high-definition music listening choice for its $9.99-per-month “free” limitless music service.
To be honest, Spotify did announce it a number of months earlier than each rivals (in early 2021) planning Launched HiFi music streaming on its platform.
Nevertheless, though SPOT stated on the time that HiFi audio was “all the time one of the vital requested new options from our customers,” the characteristic by no means materialized.
Nevertheless, this will likely quickly change. CEO Daniel Ek confirmed throughout final Tuesday’s earnings name that the corporate is growing a brand new “tremendous premium” of $17/$18 per thirty days – or as Ek put it – “luxurious” layer.
He did not present particular particulars on its content material, however rumors counsel “tremendous fan” content material and HiFi audio shall be key options.
The transfer shall be welcomed by rights holders seeking to generate extra income from subscription music streaming. Chief Monetary Officer and Chief Working Officer, Common Music Group Boyd Muir “As many as 20% The present consumer base can improve to ultra-premium tiers at considerably increased costs for compelling product configurations.”
The introduction of HiFi audio as a part of the Deluxe Version can even please audiophiles resembling Neil Younger, who has been urging Spotify to affix the HiFi camp for years.
However as SPOT prepares to launch its potential “deluxe” tier that helps high-fidelity audio, new statistics launched final week seem to point that curiosity in HiFi audio has been waning over the previous 4 years.
In accordance with Luminate’s 2024 mid-year report (which you’ll learn right here), high-quality audio (together with HiFi, lossless, and many others.) is turning into much less and fewer necessary to paid music streaming in america.
Citing its U.S. Music 360 survey report for the primary half of 2024, Luminate stated that by 2024, 31% Paid music streaming customers in america stated that high-quality audio is the first consideration amongst customers who’re contemplating switching or attempting new companies within the subsequent six months. Luminate calls these customers “in-demand paid music streaming customers.”
In accordance with a report by Luminate, by 2023, 34% of paid music streamers say high-quality audio is a prime precedence. In 2022, that is 36%, and 37% 2021.
As you possibly can see from the Luminate chart under, components like “Unique artist content material” and “Reside performances” are extra necessary than components like “ease of use” for paid streamers seeking to change/add companies within the subsequent six months. of better relative significance to media” and “high-quality audio”.
In fact, “unique artist content material” and “dwell performances” might seem in so-called tremendous fan golf equipment, which can possible be included within the new “deluxe” Spotify tier.
Statistics present that buyers are paying much less and fewer consideration to high-quality audio since 2021, which could possibly be interpreted as proof of Spotify’s reluctance to prioritize this characteristic over the previous 4 years.
Now understanding this data, it might truly make sense for Spotify to make HiFi Audio a part of a broader product replace or a “deluxe” tier that features tremendous fan content material, quite than making HiFi Audio the core focus of an extra tier.
Alternatively, these statistics could also be a bit worrying for these platforms have Some huge cash has been invested in HiFi audio technique over the previous 4 years.
apple music, For instance, he’s a outstanding advocate for high-fidelity music streaming. Take into account that lossless audio and Dolby Atmos-enabled spatial audio can be found on its service at no further value.
Moreover, in January, we reported that music obtainable within the Spatial Audio format on Apple Music would obtain a bigger share of royalties from the platform.
Apple Music stated in an replace to its label mannequin obtained by MBW on the time that the change in royalty shares was “not simply to reward increased high quality content material, but additionally to make sure artists are compensated for the time and funding they put into the combo”.
The platform additionally stated it noticed “widespread adoption of Spatial by the world’s greatest hitmakers” 80% Songs that entered Apple Music’s world each day prime 100 final 12 months can be found in Spatial. However I need to know the reply to a giant query: Will Apple’s funding in lossless and house repay within the type of new customers?
Since lossless audio is a key differentiator between Apple Music (and Amazon Music) and one among its greatest rivals, Spotify, it might make good sense to incorporate this characteristic on their platform without spending a dime in the event that they see wholesome consumer development.
However we’ve got motive to imagine they don’t seem to be.
“Whereas Spotify, YouTube and plenty of regional and native platforms proceed to point out wholesome consumer development, different giant companions have been much less profitable in driving world adoption and new consumer development has slowed.”
Common Music Group Boyd Muir speaks on Common Music Group second-quarter earnings name
Neither Apple Music nor Amazon Music publicly report their subscriber metrics, however throughout Common Music Group’s earnings name final week, UMG’s Boyd Muir famous that “subscriber development is slowing on some platforms ”. He didn’t identify the platforms.
He added: “Whereas Spotify, YouTube and plenty of regional and native platforms proceed to see wholesome consumer development, different giant companions have been much less profitable in driving world adoption and new consumer development has slowed.
“We’re in deep conversations with all key companions about product innovation to focus on high-value clients and drive future income development. One signal of those discussions was highlighted by Spotify’s feedback yesterday about its tremendous premium product.
As you possibly can see, Muir particularly talked about Spotify and YouTube as having good consumer development. Though he didn’t identify him, he Can Have been speaking about Apple Music and Amazon Music. Each platforms supply high-fidelity audio at no further value.
If UMG’s management crew refers to Apple Music and Amazon Music as giant companions with “slowing new subscriber development,” then high-fidelity audio is clearly not sufficient of a differentiator for these companies to get shoppers to decide on them.
Again to the potential of Spotify’s $18-a-month “Deluxe” plan and its super-fan ingredient, Luminate studies 48% Customers “prone to churn” prioritize unique artist content material (see under).
On the similar time, in contrast with strange paid music streaming, 49% of shoppers “prone to churn” prioritize content material apart from music, whereas 50% prioritize dwell broadcasts of occasions, concert events, and dwell performances.world music enterprise
