In February, TechCrunch ran a report saying Spotify was thinking about an IPO, but had confirmed that it would not happen until 2018. The delay, it said, would give Spotify time to improve its balance sheet.
That kind of phenomenal growth still hasn’t made Spotify profitable, unfortunately, and the music streaming service continues to bleed money.
There is also word that Spotify will move from its Manhattan office into the World Trade Center and add 1,000 more jobs. That’s more money out of pocket for a company that isn’t making any profits.
We don’t know when Spotify will be able to make its balance sheet look a little healthier, but the company is trying out some A/B split testing on the pricing of a new Hi-Fi tier, according to some Reddit posts we’ve seen.
The lossless version of its music streaming service is being testing at a pricing of between $5 and $10 per month, but some Reddit users aren’t convinced that it’s not worth the money to upgrade from the current 320Kbps.
Nevertheless, Spotify is very likely to launch the new subscription tier very soon, and it will serve as an additional conduit for revenue that the company sorely needs.
Now that the music streaming service has 50 million paying customers, it will be interesting to watch and see how many of those they’re able to convert to the new Spotify Hi-Fi service level.
The company has a long way before it can make an initial public offering. Right now their goal is to keep revenue growth up and try and squeeze out some positive operating profits at the earliest opportunity.
The Spotify Hi-Fi move is a great idea, but will it gain any traction with users? That’s what we’d really like to find out.
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