A few users reported that their Spotify app was showing ads for a new Hi-Fi package for the service. The price ranged from an additional $5, $7.50, $10 for lossless music, hence the Hi-Fi tag. The pop-ups that have been put up online showed different features for different prices and whenever any user reported clicking on the Upgrade option, the app showed an error message. This is probably because the message is an A/B pricing test before Spotify launches the service full scale.
Spotify Hi-Fi offers lossless, CD-quality music, and all premium features but different banners show options for Discounts on limited edition vinyls”, “One free vinyl (record)” and even “Exclusive pre-sale concert tickets”.
More and more devices are losing the 3.5 mm headphone jack and switching to wireless headsets, USB-C, or in the case of Apple, the Lightning ports, hence the move to lossless audio makes sense. These media can handle streaming higher detail audio. And of course, the lossless audio streams will genuinely attract audiophiles. However, not everyone is an audiophile but if they’re willing to pay $5 for much higher quality music, Spotify may become profitable. The streaming has 40 million paying customers*. Even a tiny fraction of those customers paying more can benefit Spotify.
Apart from the lossless audio, this marks a departure from the norm for Spotify as it’s venturing into the physical market. It could interest audiophiles and hipsters and enthusiasts with the vinyl discounts and a lot of fans with the pre-sale concert tickets (which is a potential goldmine). I wonder if other streaming services will follow suit.
As for official confirmation, Spotify is holding off on it, of course.
“We are always testing new products and offers but have no news to share at this time.”
-Spotify spokesperson (The Verge)
Spotify is going the opposite route of other companies like Amazon and SoundCloud. While Amazon Music Unlimited offers its services at $9.99, cheaper rates are reserved its Prime Members and Echo/Dot/Tap owners. SoundCloud very recently announced its $4.99 value service to rake in more revenue. It seems that a price hike for better features is counter intuitive. However, in this age of integration of services, tickets and records are naturally, eventually going to be sold by the big music providers. And those aren’t going to be the record companies but the streaming companies. In fact, I won’t be surprised if one day, new artists enter a space called Spotify studios or Apple Music studios to record their albums.
*Update: Spotify has hit 50 million paying subscribers