Spotify stated on Monday that it would raise the cost of its Premium subscription plans in the United States by up to $2, which equates to a 20% price increase for some plans.
According to the business, the market environment has “continued to evolve” and the modifications would enable it to “continue to deliver value to fans and artists.” Existing customers will receive email notifications about the pricing increases and a “one-month grace period” before the new costs take effect.
Raise the cost of its Premium subscription plans
On Monday, Spotify revealed it would raise the cost of its Premium subscription plans by up to $2, which equates to a 20% price increase for some plans. According to a blog post, the business claimed that since Spotify’s inception, the market environment has “continued to evolve” and that these changes will enable it to “continue to deliver value to fans and artists.”
The price of Spotify’s Premium Individual plan has increased to $10.99 from $9.99, and the cost of its Premium Duo plan has increased from $12.99 to $14.99. The premium family plan from the corporation now costs $16.99 instead of $15.99, while the student option now costs $5.99 instead of $4.99.
On Monday, shares of Spotify decreased by more than 4%. Additionally, Spotify is raising its fees in a number of additional nations, including Australia, Canada, France, the United Kingdom, and Mexico. Existing customers will be informed via email of the pricing adjustments and given a “one-month grace period” before the new costs take effect, according to the business.
Adapting to shifting market conditions
The business stated on its website that it was adjusting its premium subscription plans as it expanded its platform in order to adapt to shifting market conditions. At 6 a.m. ET on Tuesday, Spotify will release its quarterly earnings. The price rises coincide with increased investor pressure on streaming services, both audio and video, to increase profitability after years of putting user growth first.
This year, rival services like Apple, Amazon.com, and Tidal have all raised their pricing, and last week, YouTube did the same in the United States for the first time since the subscription service’s introduction in 2018. Last year, prices were increased in 46 countries by Spotify, which had hinted in April that it might do so in 2023.
Spotify has increased the cost of its premium subscription plans in a number of nations, including the US, UK, and Australia, as it seeks to increase profitability in a shaky financial climate. Due to the change, Spotify’s US plans will now cost $1 more per month, with the premium single plan starting at $10.99, the duo plan at $14.99, the family plan at $16.99, and the student plan at $5.99.
With hundreds of layoffs and a restructuring of the podcast division, which it had invested billions of dollars in building up, Spotify has taken action in recent months to increase margins. The price hikes occur as investors put more pressure on streaming services, both audio and video, to generate profitability after years of putting user growth first.