Spotify’s quarterly earnings report sparked concerns about potential price hikes to boost margins. CEO Ek defended the measured approach, prioritizing customer retention over quick financial gains. The stock plummeted 10% after a Q2 loss and weak guidance. Spotify’s recent price increases led to improved gross margins and a 120% stock rally.

Analysts question Spotify’s pricing strategy, suggesting more aggressive increases like rivals Apple and YouTube. Despite concerns, Ek emphasizes a nuanced approach balancing monetization and user retention. Gross margins dipped to 31.5% in Q2, below previous highs, with an expected further decline in the current quarter due to regulatory costs and music label deals.

Read more at Yahoo Finance: ‘A lot better to keep the customer around’