Spotify Technology SA (SPOT) is doing what every streaming platform eventually does: adding more stuff to keep you glued to the app. The latest addition? Music videos.
The company announced Tuesday that Premium subscribers in the U.S. and Canada can now access music videos, transforming what was primarily an audio experience into something more visual and, hopefully for Spotify, more engaging. We're talking official music videos, live performances, and artist covers—the kind of content that makes people hit replay and share with friends.
The logic here is straightforward: passive listeners are fine, but active fans are better. Videos increase repeat streams, saves, and shares while giving artists another way to connect with their audience. Spotify is betting that a "switch to video" button and discovery features across devices will boost time spent in-app and create new monetization opportunities as the video catalog grows.
So far, the market likes what it's seeing. Spotify (SPOT) shares are up 33% year-to-date, and the stock gained 3.42% to $591.91 following the announcement.
The Price Hike Everyone Saw Coming
But here's the thing about adding features: they often come right before price increases. According to a November report, Spotify is preparing to raise U.S. subscription prices in early 2026. JPMorgan analysts estimate this move could generate an additional $500 million in annual revenue.
The timing isn't random. Spotify needs to reverse declining monetization per user, and record labels have been pushing for inflation adjustments. This all happens as incoming co-CEOs Gustav Söderström and Alex Norström prepare to take the helm, presumably with a mandate to squeeze more revenue from the platform's massive user base.
On CNBC's "Mad Money Lightning Round," Jim Cramer gave Spotify his seal of approval, calling it "a great subscription business" and recommending it as a buy. That endorsement reflects growing confidence in Spotify's ability to balance user growth with profitability—something streaming platforms have historically struggled to achieve.
The music video rollout and potential price hike tell the same story: Spotify is evolving from a simple music streaming service into a broader entertainment platform that can justify charging more while keeping subscribers happy enough not to cancel.