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Music streaming giant Spotify has announced that it will cut 6% of its staff, with around 600 employees in total leaving the company.
Spotify’s move is the latest in a series of mass layoffs at big tech companies, with Microsoft, Amazon, Facebook parent Meta, and Google parent Alphabet all recently announcing job cuts in response to the recession. current economy. Previously, tech companies had been on a hiring spree as spending fueled by the pandemic fueled a greater need for consumer goods and services.
But Spotify isn’t the only entertainment streaming service cutting staff: Netflix cut 2% of its workforce in May of last year as part of a larger cost-saving effort where it canceled a number of projects in development, many of them in the company’s animation department.
Spotify had previously made its own content cuts in a bid to cut costs. In October 2022, the company removed 11 original podcasts, most from the Gimlet and Parcast studios the company had acquired as part of its aggressive push into the podcast industry. Spotify had spent billions of dollars building its podcast presence, losing $200 million on its contract with Joe Rogan alone, the platform’s number one audience draw.
It’s unclear how Spotify’s problems will affect future pricing, but subscription costs for the best music streaming services are rising overall, Apple Music increased the price for an individual plan from $9.99/£9.99 to $10.99/£10.99 per month (and $4.99/£4.99 to $5.99/£5.99 for a student plan) in October 2022, followed by similar Price increases announced for Amazon Music Unlimited.
CEO Daniel Ek commented in the company’s layoff announcement that “in 2022, Spotify’s operating expense growth outpaced our revenue growth twice” and that the situation was “unsustainable long-term in any climate.” Spotify is clearly in trouble, and Ek’s statements seem to indicate that costs for the service, which has held a steady $9.99 / £9.99 individual pricing plan since its early days, will soon rise as the company pushes to make against rising costs. and falling income.
As reported by Variety, the Spotify CEO had previously said in an October 2022 earnings call that a price increase “is one of the things we’d like to do and it’s something we’ll do.” [discuss] with our record partners.
Analysis: A more expensive Spotify will be a hard sell
Streaming prices are going up for all sorts of services, and a price increase for Spotify is something that music listeners who have used and depended on for a long time can easily stomach. After all, Apple Music and Amazon Music Unlimited are now more expensive, and the cost of everything from eggs to plane tickets is rising.
Right?
Not so fast. Compared to Apple Music and Amazon Music Unlimited, Spotify was already a poor value. For their cost of $10.99 / £10.99 per month, both Apple Music and Amazon Music Unlimited offer high-resolution, lossless audio, while Spotify continues to stream using a lossy compression format that reduces sound quality. The company had announced plans for a hifi spotify level with lossless Hi-Res Audio, but that was in 2021 and we’re still waiting for it. (It’s unclear if the higher-quality tier would be priced significantly higher than the company’s current Premium offering.)
Apple Music and Amazon Music Unlimited also provide full tracks and albums in Spatial Audio, essentially Dolby Atmos for music, as does Tidal, another music service that offers lossless streaming, and does so at a cost of $9.99 / £9.99 per month. Spatial Audio, which can be experienced with headphones or with a full home theater speaker system, continues to impress us with its sound quality and is one of the most exciting developments in music listening in decades.
The cost of Apple Music and Amazon Music Unlimited can also be reduced by purchasing any of those companies’ largest combined subscription services. Apple is offering its Apple One bundle, which includes Apple Music, Apple TV Plus, Apple Arcade and 50GB iCloud Plus cloud storage for $16.95 / £16.95 for an individual plan and $22.95 / £22 .95 per month for a family plan with up to five accounts If you’re an Apple user, you’ll get a lot for your money.
Meanwhile, Amazon Music Unlimited is available at a reduced price for Amazon Prime members (currently $8.99 / £8.99, though that may increase to $9.99 / £9.99 when the price of the service goes up in February).
When you add it all up, Spotify really doesn’t provide enough for music fans to justify any possible price increase. It offers exclusive podcasts and, at least in the US, audiobooks, but most listeners gravitate towards his platform for music. We’ll see what happens in the coming weeks or months as the smoke clears from the company’s downsizing, but a more expensive Spotify at this point seems inevitable.
