The news: Spotify will bring high-fidelity, “lossless” audio to premium subscribers over the next two months across 50 markets, putting an end to years of speculation that it might gate the feature behind a more expensive subscription tier.

Zooming out: Many of Spotify’s competitors, including Apple Music, Tidal, and Amazon Music, also offer lossless audio to standard subscribers—likely why Spotify, which already faces a wave of public criticism due to its artist payment model and personal investments made by CEO Daniel Ek, chose not to charge more for the feature.

Falling flat: While it’s important for Spotify to achieve feature parity with competitors as the sector’s leader, it’s uncertain how many new subscribers the feature will drive—and it certainly won’t do anything for Spotify’s advertising revenues, which have become a pain point in recent quarters.

The vast majority of Spotify’s 696 million users use the platform for free with advertising—but advertising only accounted for approximately 11% of its total revenues in Q2 2025. Its 276 million premium members account for the remaining 89%.

That discrepancy has led to pressure from investors to focus on increasing advertising revenues, but economic uncertainty has made a major advertising push tricky to pull off.

• The company has expanded the ability to buy ads programmatically and debuted several AI-powered features designed to lower the barrier to entry, but anxieties about consumer spending and tariffs have stymied adoption of new advertising channels.
• Monthly active advertisers grew 40% YoY in Q2, but Ek said the company’s ad business needed to grow faster.

Our take: Lossless audio certainly won’t be a detractor for Spotify and could help make it an even stickier service with low churn—something the company already excels at.

While it is unlikely to drive subscriptions and doesn’t address the company’s advertising pains, it doesn’t hurt to add features that will keep users from cancelling or drifting to competitors.