If the Spotify Premium subscription was $4.99, you would easily get twice the number of subscribers, and hopefully even more than that. More users is worth more than revenue in the short term, because increased number of users means higher potential for new subscribers. PLEASE think about it.
There are many users on the fence like myself who would subscribe at this level instantly. At the moment I just cannot justify it at $9.99/mo when services like NetFlix cost $7.99 for unlimited streaming of movies.
"You have nothing to lose but the free-loaders!" :)
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I agree with you guys too, Spotify is a great deal! However, I think you missed the point of my message: I think Spotify will likely be able to make *more* money in the mid to long term if they reduce premiums since many people are sitting on the fence due to the seemingly high subscription price. I'm pretty sure if they lower subscription to match NetFlix at $7.99 or even lower at $4.99, the number of subscribers would increase dramatically and easily make up for the price difference in the mid to long term. More subscribers and a larger Spotify community will only improve the service and Spotify experience.
However, it's possible this is a delicate balance between bandwidth and cost which I'm not taking into account, ie, if there are more users, it'll take more bandwidth, and result in higher costs for Spotify. Thus if they cut the subscription price in half, they must increase number of subscribers by more than double to make up for the addtional bandwidth, storage, etc, costs. Perhaps still possible at $7.99. Who knows... we can't see their books so it'll be great if someone from Spotify could comment...