Spotify CEO Explains Pricing Strategy vs. Peacock

On Tuesday, Spotify executives took the time to address concerns about their pricing strategy during their second-quarter 2025 earnings call. Analysts were curious as to why Spotify doesn’t raise subscription prices more quickly in developed markets, especially when other platforms like Peacock have done so, despite lower engagement levels.

Spotify’s Chief Business Officer, Alex Norström, explained that the company’s approach has always been to prioritize subscribers. He emphasized the importance of providing value for the price paid, stating that they have recently raised prices and have seen strong customer retention as a result. Norström mentioned that pricing decisions are made on a market-by-market basis, taking into account engagement levels and perceived value. “We take a portfolio approach,” he said, noting that even developed markets differ from one another.

CEO Daniel Ek reiterated this strategy, emphasizing that managing for customer retention is key when operating a subscriber service at scale. He highlighted the importance of keeping customers engaged for the long term rather than losing them and trying to reacquire them later.

While Spotify reported a second-quarter loss of $0.48 per share, missing expectations, they also posted $4.75 billion in revenue, up 10% year-over-year. The company remains committed to its value-to-price approach, which has proven successful in retaining subscribers.

In comparison to other major music streaming platforms like Apple Music, Amazon Music, and YouTube Music, Spotify has been cautious about increasing prices rapidly. They take a thoughtful and deliberate approach to pricing changes, ensuring that they continue to provide value to their subscribers. This dedication to customer satisfaction and retention sets Spotify apart in the competitive streaming industry.