Spotify Grows Premium Subscriber Base To 246 Million, But What Happened To The High Quality Lossless Audio?

There were a lot of good numbers thrown about as Spotify made a second quarter earnings call on Tuesday – but was there any good news for audiophiles who care less about earnings and more about sound quality?

Spotify reported its most profitable quarter ever, and the company’s stock was up 14% in premarket trading on Tuesday (USA time).

The audio streaming service also grew its monthly active users (MAU) by 14% to 626 million globally last quarter, but Axios reports this was a little shy of investor expectations, which were at 631 million.

However the company grew its premium subscriber base to 246 million globally, which was over one million more than expected. Revenue from subs grew 21% year-on-year thanks to those new subscribers and higher user fees.

“Spotify reported 3.8 billion euros (US$4.15 billion) in total revenue in the second quarter, a 20% increase over the year-ago period, and a record-high gross margin of 29.2% due to favorable music content costs,” Billboard reported.

“Spotify’s operating income was up for the second straight quarter to 266 million euros ($289.6 million) on a higher gross margin and lower marketing, personnel and other costs.”

Spotify co-founder and CEO Daniel Ek told Axios he “expects his company’s profit margin growth to continue for the foreseeable future”.

But what about high-end audio?

Spotify has been hinting at a top-tier product – working title Spotify HiFi – for a few years. It promised “CD-quality, lossless audio format” that could compete with the likes of Tidal, Apple Music and Qobuz.

Digital Trends said that during the earnings call Ek “acknowledged that a good number of Spotify’s 246 million Premium subscribers want higher-quality audio”.

“The plan here is to offer a much better version of Spotify,” Ek said. “So think something that could be something like [US]$5 above the current premium tier. It’s probably around the [US]$17, or [US]$18 price point.

“Sort of a deluxe version of Spotify that has all of the benefits that the normal Spotify version has, but a lot more control, a lot higher quality across the board.”

Spotify HiFi would reportedly include new tools for creating playlists.

Ek, however, conceded that plans for better audio were still in their “early days”.

So, as Spotify focuses on audiobooks, ad revenue and growing both free and premium user bases, those with million-dollar ears will just have to wait on hold.