Spotify is contemplating additional price adjustments, as indicated by statements from co-founder and Chief Executive Officer Daniel Ek during the company’s quarterly earnings discussion on Thursday. The streaming platform successfully onboarded 6 million new subscribers in the third quarter, reaching a total of 144 million paying customers among 320 million active users; however, the company experienced shortcomings in both sales and profitability, which negatively impacted its stock performance.

By adjusting the cost of its service, Spotify anticipates generating increased revenue in regions where the company believes subscribers will continue to recognize the benefits of a paid streaming subscription.

The company refrained from providing specific details regarding the planned price increases, such as exact amounts or geographic locations. Nevertheless, Ek clarified the company’s overall approach to potential price adjustments.

He stated that while attracting new users remains a primary objective for Spotify, certain markets are more established and demonstrate an increased value proposition for subscribers, particularly with the introduction of “enhanced content.”

By “enhanced content,” Ek refers to Spotify’s investments in expanding its content offerings, notably in the podcasting sphere. Currently, the service hosts 1.9 million podcasts. This quarter saw the release of 58 original and exclusive podcast programs, extending this selection to a total of 16 countries.

Notable highlights include “The Michelle Obama Podcast,” which debuted at the top of the platform’s charts in July and August. Spotify’s collaboration with DC Comics is beginning with the “Batman Unburied” podcast. The company is also partnering with Riot Games’ “League of Legends” for an esports initiative and with Chernin Entertainment to adapt podcasts into film and television projects.

However, Spotify’s agreement with “The Joe Rogan Experience” has generated some debate. Integrating the program in-house could potentially create content moderation challenges and may lead a segment of users to cancel their subscriptions due to political considerations.

This month, Spotify also introduced new functionalities for Anchor users, enabling them to incorporate commercially licensed music into their podcasts, fostering a novel format of combined music and spoken-word programming.

Collectively, Spotify views these developments as justification for potentially increasing prices in select markets.

In its more mature markets, Spotify reports consistent growth in both user engagement and the value derived per hour of use.

“I am of the opinion that growth in value per hour is the most dependable indicator we possess for determining when we can leverage price adjustments to expand our business,” Ek explained.

He also mentioned that preliminary trials of price increases have yielded positive results.

“Although it is still early in the process, initial findings suggest that in markets where we have tested higher prices, our users continue to perceive Spotify as offering exceptional value and have demonstrated a willingness to pay more for our service,” Ek stated. “Consequently, we will continue to broaden the implementation of price increases, particularly in areas where we maintain a strong competitive position and the value per hour is substantial,” he added.

Spotify has been openly alluding to potential price increases throughout the year.

During the first quarter, Ek initially indicated the possibility, stating it was “encouraging” to observe the company’s potential to raise prices as economic conditions improved. In the second quarter, Ek again suggested that higher prices were forthcoming, adding that Spotify’s exclusive podcast content provides “pricing power,” alongside its overall service enhancements and increasing ARPU (average revenue per user).

Today, Ek’s statement implies that higher prices are not merely under consideration or discussion—they are imminent.

To date, Spotify has tested price increases on its premium service tiers in several regions.

Last year, for instance, Spotify experimented with price increases for its Family Plan in certain Scandinavian countries, raising the cost by approximately 13%. The purpose of these tests was to assess the feasibility of implementing higher pricing on a global scale.

Just this month, reports indicated that Spotify had increased the price of its Family Plan in Australia from AUS $17.99 to AUS $18.99—equivalent to roughly US $13.69. This change took effect on October 1 for new subscribers.

This month, Spotify also announced price increases for the Family Plan in six additional markets, including Belgium, Switzerland, Bolivia, Peru, Ecuador, and Colombia, as well as for its Duo Plan (a two-person plan) in Colombia.

However, Spotify’s plans for higher pricing were subject to one qualification: the pandemic. Ek stated that the company would “continue to proceed cautiously during these times impacted by COVID-19 to ensure we do not move ahead of market conditions.”

In essence, raising prices during an economic downturn, when individuals have experienced job losses and are reducing discretionary spending—such as streaming subscriptions—is not advisable.