Music streaming giant Spotify has announced it will cut 6% of its staff, with about 600 employees leaving the company.
Spotify’s move is the latest in a series of mass layoffs from big tech companies, with Microsoft, Amazon, Facebook parent Meta and Google parent Alphabet all recently announcing job cuts in response to the current economic downturn. Technology companies were earlier on a hiring spree as spending fueling the pandemic increased the need for consumer goods and services.
But Spotify isn’t the only entertainment streaming service cutting staff – Netflix has cut 2% of its workforce Back in May last year as part of a larger cost-saving effort it canceled a number of projects in development, many of them in the company’s animation division.
Spotify has previously made its own content cuts in an effort to cut costs. In October 2022, the company disqualified 11 original audio files, mostly from Gimlet Studios and Parcast that the company had acquired as part of its aggressive push into the podcast segment. Spotify has spent billions of dollars growing its podcast presence, dropping $200 million alone on its contract with Joe Rogan, the platform’s number one audience.
It’s unclear how Spotify’s problems will affect future pricing, but subscription costs are The best music streaming services It’s going up overall, with Apple Music raising the price of the 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 the student plan) back in October 2022. , followed by similar Announcing Amazon Music Unlimited’s price hike.
CEO Daniel Eck commented in the company’s layoffs announcement that “in 2022, Spotify’s operating expense growth has more than doubled our revenue growth,” and that the situation was “unsustainable in the long term in any climate.” Spotify is clearly in hot shape, and Ek’s data seems to indicate that costs for the service, which has kept a flat $9.99 / £9.99 single pricing plan since its early days, will soon rise as the company grapples with rising expenses and declining revenues.
As reported by Variety, Spotify’s CEO previously said on 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 rating partners.
Analysis: A more expensive Spotify would be hard to sell
Streaming prices are skyrocketing for all kinds of services, and Spotify’s price hike is something that can be easily swallowed by music listeners who have long used and relied on it. After all, Apple Music and Amazon Music Unlimited are now getting more and more affordable, and the cost of everything from eggs to airline tickets is going up.
Not so fast. Compared to Apple Music and Amazon Music Unlimited, Spotify was really bad value. For $10.99 / £10.99 a month, Apple Music and Amazon Music Unlimited both offer lossless, high-fidelity audio, while Spotify continues to stream using a lossy compression format that degrades audio quality. The company announced plans to SpotifyHiFi With high fidelity lossless audio, but that was 2021 and we’re still waiting. (It’s unclear if the higher-end tier is priced significantly higher than the company’s current Premium offering.)
Apple Music and Amazon Music Unlimited also offer entire tracks and albums in Spatial Audio – mainly Dolby Atmos for music – as does Tidal, another music service that offers lossless streams, and it does so at a cost of $9.99 / £9.99 per month. spatial audio, which can be experienced on either headphones or a full home theater speaker system, Continue to convince us with sound quality, one of the most exciting advances in music listening in decades.
The cost of both Apple Music and Amazon Music Unlimited can also be reduced by buying into the larger bundled subscription services of either of these two companies. Apple is offering its Apple One bundle, which includes Apple Music, Apple TV Plus, Apple Arcade and 50GB of iCloud Plus cloud storage for $16.95 / £16.95 for an individual plan, and $22.95 / £22.95 per month for a family plan Up to five accounts. If you are an Apple user, you are getting a lot for your money.
In the meantime, Amazon Music Unlimited is available at a discounted price for Amazon Prime members (currently $8.99 / £8.99, though that could 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 audiophiles to justify any potential price increase. It offers exclusive podcasts and, in the US at least, audiobooks, but most of the listeners are attracted to its music platform. We’ll see what happens over the next few weeks or months as the smoke clears from the company’s workforce cuts, but a more affordable Spotify price tag at this point seems inevitable.