Spotify Technology’s (NYSE: Spot) The latest series of price increases in Germany, Austria and Switzerland, ranging from 8% to 22%, has aroused a renewal of optimism among investors, because changes strengthen business margins and improve its long -term growth prospects.
Strategic adjustments, which target approximately 25% of its world base of premium subscribers, should increase raw margins, especially since non -music content such as audio books and podcasts reduce fees. With similar increases probably on the main markets such as the United States by the end of the year, Spotify is ready for a significant financial impact in 2026.
Price movements have caused a positive revision of Guggenheim Analyst Michael Morris, who raised his price forecasts at $ 850, against $ 800, and reaffirmed his purchase rating. Morris projects these hikes will continue to improve the long -term growth trajectory of Spotify.
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Morris reiterated his upward position on Spotify after announcing another series of price increases on several European markets. At the end of last week, Spotify increased subscription costs in Germany, Austria and Switzerland, with increases ranging from 8% to 22% depending on the plan. Morris estimated that these markets represent approximately 10% of the SPOTIFY Premium subscribers.
The updated price, 12.99 euros for individuals in Germany and Austria (up 18%) and 13.95 Swiss francs in Switzerland (up 8%), as well as similar hikes for the duo, the family and the student plans, reflect previous adjustments to the United States and in other regions where Spotify has expanded its offer beyond music.
According to Morris, these increases will be of the gross accretive margin, as a significant part of the higher price is awarded to non -musical services such as audio books and video podcasts, which reduces the spotify fee against musical rights holders.
Earlier this month, Spotify raised prices on various emerging and secondary markets. These adjustments, which followed the company’s profits, had a largely impact on the regions excluded from the price cycle in the third quarter of 2023.
Combined, Morris estimated that the recent increases now covered approximately 25% of the world base of Spotify subscribers, which was not already affected by last year’s increases.
He also planned that Spotify will introduce another series of price changes in its largest markets, including the United States, before the end of 2025, with the financial impact to materialize at the beginning of 2026.
Given the dynamics of the industry, Morris stressed that the recent license agreements probably included increases in minimum costs per subsistant.
