Spotify shares have surged as Wall Street bulls continue to praise the company's outlook on the heels of fresh price hikes for its premium US subscription plans. The stock is up about 70% since the start of the year.
Yahoo! Finance reports the upcoming price hikes, which begin in July and are between $1 and $3, depending on the plan, follow previous hikes of certain plans implemented last summer. Analysts say the move could mean more increases for other music streamers — much to the chagrin of consumers.
"Given the size of these Spotify increases (9% to 18%) and the frequency (second time in less than a year), we believe other [streamers] should follow suit," Morgan Stanley analyst Benjamin Swinburne wrote in a note published earlier last week. Still, competitors "may not have the same pricing power as Spotify and may be more reluctant broadly."
Spotify's family plan will rise to $19.99 per month from $16.99. Duo plans, which allow two users to share an account, will increase by $2 to $16.99. Spotify Premium subscriptions will now cost $11.99 a month, an increase of $1.
Swinburne, who boasts a $370 price target and Overweight rating on shares, said the upcoming hikes "are larger and earlier than forecasted." This suggests potential upside to average revenue per user and revenue growth in the second half of the year.
"We believe Spotify's strong engagement levels and industry low churn should allow it to execute these increases and still deliver on net adds expectations," he said.
To compare, Apple Music's (AAPL) individual plan costs $10.99 a month, while its family plan sits at $16.99. It's only raised prices once, in October 2022. Meanwhile, YouTube Music (GOOGL, GOOG) boasts the same costs for its respective plans, although it's also an included option for customers who subscribe to YouTube Premium, which carries a monthly cost of $13.99.
Similarly, Amazon Music (AMZN) is free with a $14.99 Prime membership but Prime members who want access to the Amazon Music Unlimited plan will have to pay an additional $9.99 a month. The individual plan costs $10.99 for non-Prime members, while the monthly family plan clocks in at $14.99.
No comments:
Post a Comment