Spotify Hi-Fi Plan Good for Audio Companies, Pricing Key, Says Futuresource
Spotify’s announcement it’s moving into hi-fi streaming Monday (see 2102230034) demonstrates a “shift in consumer expectations,” blogged Futuresource analyst Alexandre Jornod Wednesday. The streaming audio service, which had been reluctant to offer lossless streaming, has 155 million global subscribers globally,…
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meaning “high-quality audio will finally be within reach of mainstream adoption." Amazon Music HD, available for over a year, helped drive mainstream awareness of high-quality streaming, creating “favourable grounds” for Spotify to launch its premium plan, Jornod said. The streaming service's announcement is good news for audio manufacturers, which are likely to benefit from more people having access to high-quality audio and wanting to upgrade equipment to make the most out of their lossless streaming subscription, he said. Futuresource had a surge in demand for premium audio products last year as consumers were inspired to spend more on home entertainment while sheltering at home during the COVID-19 pandemic, he noted: Shipments of $1,000-plus sound bars rose 32% year on year from Q1-Q3. High-speed internet acceleration, along with the rollout of 5G mobile networks, facilitates high-quality audio listening, said the analyst. Pricing will be key to Spotify’s success, said Jornod. Amazon’s Music HD launch forced high-quality streaming players Qobuz and Deezer to match its $15 monthly pricing. Amazon discounts Music HD to Prime members for $13 per month. Spotify will have to take Amazon pricing into account to appeal to Prime customers, he said. Amazon also has the benefit of millions of songs in 24-bit audio, while Spotify’s HiFi plan will top out at 16-bit, he said. A Futuresource survey found more than half of consumers interested in better audio quality from streaming services would be willing to pay $1-$3 more per month, or up to $12.99.