Price management is essential to maintain market position and drive growth. With Spotify, they are running a few plays well.
- Continuously build the offering – this drives the underlying value proposition. The expanding music collection, Podcast offerings, and other audio content clearly support a better offering. With a bundled approach, there would be something for most customers to maintain interest and value.
- Price increase – keeps pace with the updates to align increased value with price. Small price increases with continued growth in subscriber base demonstrates the stickiness.
- Ad revenue – supported by both better offering and resilient customer base indicates high potential value for ad sponsors. Consider the many different times users are listening without an ability to skip ads, they can be seamlessly inserted.
Pricing, well played. 