Daniel Ek Promises More Subscription Options and Bundles Ahead As Spotify’s ‘Value-to-Price Ratio’ Gets Rejiggered

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Spotify CEO Daniel Ek promises more subscription options and bundles ahead as the platform’s ‘value-to-price ratio’ gets reconfigured.

Spotify has been under fire for a lot of its decisions as of late, not least of all the company’s pivot to audiobooks in a bizarre pricing structure and its shuffling of its overall pricing tiers. The music — and audiobook — publishing industries have been less than enthused with the Stockholm-based audio streaming giant’s plans of a music-only and audiobook-only tier.

Now, CEO Daniel Ek has addressed some of those industries’ concerns during the company’s Q1 earnings call — by promising more subscription options and bundles on the horizon.

“It is really about value-to-price ratio,” said Ek. “So we’re constantly looking at how much value we’re adding, how are consumers in that market responding to that value that we’re adding, and then what is the fair price to have a good value-to-price ratio. And we’re doing this in multiple ways, of course. One is adding value into this base tier, but the other way is to increase the choice for consumers.”

“You’ve seen us over the years […] adding more ways for consumers to choose different plans on Spotify,” Ek explained. “It originally started off by being sort of just a single person plan and then went to a family plan. Then we added Duo, and then we added various ways of paying for these family plans, in, for instance, Southeast Asian markets where you can have a day pass, a week pass, and so on.”

“We want to offer as much flexibility as possible in this next stage of Spotify, […] because we’re at the size where we want to appeal to an even larger base of consumers to turn to one of our subscription offerings. So that obviously means that you’ll see things like, for instance, the audiobook only tier,” he continued.

“You should also expect to see a music-only tier as well, and all of this is in-line to just offer as much flexibility to consumers as possible for them to pick whatever plan they feel offers them the best value-to-price ratio for them.”

But that tried-and-true approach of throwing spaghetti at the wall and seeing what sticks does little to assuage the concerns of the National Music Publishers Association (NMPA). President and CEO David Israelite issued a statement against Spotify’s decision to offer an audiobook-only option, which effectively lowers the mechanical licensing rates the company pays to songwriters.

“Spotify’s attempt to radically reduce songwriter payments by reclassifying their music service as an audiobook bundle is a cynical, and potentially unlawful, move that ends our period of relative peace,” said Israelite, who all but threw down the gauntlet. “[The NMPA] will not stand for their perversion of the settlement we agreed upon in 2022 and are looking at all options.”

The 2022 settlement introduced mechanical royalty rates of 15.35% for the period of 2023-2027.