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

On Tuesday, Spotify Inc. (NASDAQ: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 (NASDAQ: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 (NASDAQ:AAPL) Music, Amazon.com, Inc. (NASDAQ:AMZN) Music Unlimited and YouTube Music, a subsidiary of Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ: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.

Read Next

• Apple's Liquid Glass Interface Set To Revolutionize iOS 26, Hints At 20th Anniversary iPhone

Photo Courtesy: Shutterstock.com

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