Why Spotify Won't Raise Prices Like Peacock: CEO Explains The 'Pedestal' Strategy

On Tuesday, Spotify Inc. SPOT executives addressed concerns over pricing strategy during the company's second-quarter 2025 earnings call.

What Happened: During the call, analyst Rich Greenfield questioned why Spotify doesn't raise subscription prices more quickly in developed markets, especially when platforms like Comcast Corp's CMCSA Peacock have done so despite lower engagement.

Spotify Chief Business Officer Alex Norström responded by stressing the company's "value-to-price" approach.

We've "always put subscribers on a pedestal," he said. "We've raised prices recently and seen very strong retention … We will use [pricing] again when we feel it's appropriate for the business."

He added that pricing decisions are made on a market-by-market basis depending on engagement levels and perceived value. "We take a portfolio approach," Norström said. "Even developed markets are different from one to the other."

See Also: Meta's Strong Revenues May Offset Concerns Over Soaring AI Investments: Analyst

Spotify CEO Daniel Ek reinforced the strategy, saying, "The biggest thing to realize as you’re operating a subscriber service at scale is really managing for retention…[it's] a lot better to keep the customer around for a longer time than to lose the customer and then try to reacquire the customer."

Why It's Important: Spotify reported a second-quarter loss of $0.48 per share, missing expectations of a $2.11 profit and posted $4.75 billion in revenue—up 10% year-over-year but below the projected $4.84 billion.

Here’s a comparison of the latest U.S. price hikes for individual plans across major music streaming platforms — Spotify, Apple Inc.'s AAPL Music, Amazon.com, Inc. AMZN Music Unlimited and YouTube Music, a subsidiary of Alphabet Inc.'s GOOG GOOGL Google:

Price Action: On Tuesday, Spotify shares dropped sharply by 11.55% in regular trading, but edged up 0.16% after hours, according to Benzinga Pro.

Benzinga’s Edge Stock Rankings show that SPOT maintains strong momentum across short, medium and long-term periods. While the stock has a solid growth score, its value rating remains relatively weak. More detailed performance insights are available here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.