![]() ![]() Unlike Facebook which can seamlessly integrate ads into our feed, Spotify ads come in between music, which can have a meaningful impact on the experience of users. Although these challenges are likely to prove short-lived, I believe Spotify will continue to find it difficult to grow this business due to fundamental challenges. This will pose a challenge to Spotify's mission to increase the penetration of premium subscribers.Ĭoming to the monetization of ad-supported users, the company is grappling with macroeconomic challenges that have dampened the outlook for the global advertising sector. The coming price increases, on the other hand, will not incentivize ad-supported users to pull the trigger to become premium subscribers. If some users downgrade to the ad-supported plan, the overall monetization will take a hit as the company has struggled to gain momentum with ad revenue. This is a welcome move that will help the company reverse the recent trends in ARPU, but amid intensifying competition and challenging macroeconomic conditions, the company may have to settle for an increased subscriber churn as well. The company has successfully executed price hikes in the past, and on Monday, announced another price hike that would see the prices of some U.S.
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