Spotify announces a “super-premium” tier for superfans and an upcoming video expansion in its third-quarter earnings release

Spotify CEO Daniel Ek has again touted the company's long-delayed HiFi or “super-premium” tier, a higher-quality subscription to the streaming service that was first announced in 2021 and then failed to launch.

In the third-quarter earnings call with investors on Wednesday, the executive indicated that such a product is still on the way, while also pointing to the company's near-term progress in other areas, including an upcoming expansion of its video offerings and improved other products through AI.

The streamer first announced plans to introduce a deluxe version of its premium subscription several years ago, which would include features like “CD quality, lossless audio” and more, but licensing issues led to a delay, Ek explained in 2022.

However, that didn't stop Spotify from unveiling the offering to investors in subsequent quarters. For example, in July, Ek said Spotify planned to launch an upgraded version of its subscription that would cost about $17 to $18 per month, about $5 more than the current Premium tier. At the time, he noted that the plan would give users more control over their music in addition to resulting in better audio quality.

Since both Apple Music and Amazon Music have offered lossless audio streaming for years, it's unclear why Spotify held off launching for so long. While some speculated features like AI playlists may ship with a deluxe tier, Spotify instead launched this tool for its premium subscribers earlier this year.

In recent months, it seemed like Spotify had expanded its focus for its deluxe offering to include more than just videos.

Billboard reported this year that major record label UMG is working with Spotify to create a subscription tier for superfans that could include things like early access to new music. The news follows Spotify's expanded partnership with UMG announced in March, which would give artists more promotional tools and improved distribution and access to music videos. Additionally, a UMG investor presentation noted that 20% of streaming subscribers would be willing to pay for a combination of early access to music plus higher quality audio and listening party invitations.

On the third-quarter earnings call, investors brought up this superfan-focused tier again, and Ek said the upcoming higher-priced tier would include better sound quality and, vaguely, “a bunch of other things.” He also referenced the idea that catering to superfans would be part of the subscription draw.

“For us, the principle is always the same: How do we create something that consumers love, but that also provides value to creators? And you can go back to the vinyl buyers, you can go back to all these superfans that already exist to look for clues as to what some of the things they value are.”

However, Ek declined to address what role Spotify might play in music labels' own efforts around “superfan” apps, saying only that Spotify would “be happy to explore opportunities to contribute to that growth as these apps become available.” “would generate great appeal for consumers.” .”

On the call, Ek also promoted the company's creator-focused event in LA this week, which will include announcements about expanding video offerings on the platform. At the event, Spotify will showcase its efforts to provide access to Spotify's audience for creators who want to be present on more platforms and encourage others to move their entire offering to Spotify. This is likely related to a Bloomberg report from the fall that said Spotify was courting creators with seven-figure contracts to publish their content on Spotify.

In response to questions about AI, Ek praised the success of Spotify's AI DJ feature, which, alongside video, has been a standout initiative to drive engagement beyond just small, individual cohorts, as is the case with many product launches. Still, he warned that Spotify's investments in AI would be disciplined and designed to drive engagement or increase customer retention, and that it would not simply be “reckless spending.”

Shares of the company rose more than 10% on Wednesday morning after the company said it added slightly more subscribers than expected in the quarter and provided upbeat guidance for the fourth quarter. Monthly users topped 640 million and the company reported operating profit of €454 million on revenue of €4 billion, up 19% from the same quarter last year.