Music-streaming giant Spotify has announced that it will be increasing its premium plan prices, confirming reports that surfaced over the weekend. The company’s main premium ad-free subscription plan will be increasing from $9.99 per month to $10.99 in the U.S., while its Duo plan is rising by $2 to $14.99.
Global Price Hikes
The subscription hike isn’t limited to the U.S. market, with Spotify confirming that it will be increasing its prices in dozens of markets, including much of the European Union (EU), the U.K., and chunks of South and Central America, Asia, and Oceania. The company hasn’t communicated prices for these markets yet, saying that those affected will start receiving emails from today confirming their new rates.
Regional Price Variations
Eurozone customers are seeing single-euro increases on the individual premium plan, although prices already vary across the region so the new price will depend on where you live. For example, in Finland, the price has gone up €1 to €11.99 per month, whereas in France it has risen to €10.99. Germany, on the other hand, seems to be staying the same at €9.99 per month.
UK Price Hike
In the U.K., premium subscribers will pay an extra £1 at £10.99 a month.
Earnings and Profitability
The price increase is notable, insofar as it’s the first time that Spotify has altered its main premium pricing plan in many of its core markets, including the U.S. and large parts of Europe, whereas streaming counterparts such as Netflix have regularly updated their pricing tiers through the years.
It’s also worth noting that today’s announcement comes a day before Spotify is due to report its Q2 2023 earnings, with a price hike one obvious conduit for the Swedish company to increase its revenues in its push toward sustained profitability — and, ultimately, keeping its shareholders happy. Apple also increased its premium subscription from $9.99 to $10.99 last October, so today’s news essentially aligns Spotify with its main music-streaming rival.
New Subscription Plan
Reports surfaced earlier this year that Spotify is working on a new subscription plan that will give users access to higher-quality "lossless" music, and is reportedly set to launch in the U.S. later this year with a tentative price of $19.99 per month.
Impact on Users
The price hike may have an impact on some users who are currently subscribed to the premium plan at the lower rate. However, Spotify will likely continue to offer promotional periods and discounts for new subscribers, which may help mitigate any potential backlash from users.
Market Trends
The music-streaming industry has seen significant growth in recent years, with services such as Spotify and Apple Music leading the charge. The price hike by Spotify is a reflection of the company’s continued focus on increasing revenue and profitability.
Conclusion
Spotify’s decision to raise its premium plan prices may have an impact on users and shareholders alike. However, it’s clear that the company is committed to driving growth and profitability in the music-streaming industry. As the market continues to evolve, it will be interesting to see how Spotify and its competitors adapt to changing consumer preferences and trends.
Timeline of Events
- 2022: Reports surface that Spotify is working on a new subscription plan with higher-quality "lossless" music
- October 2022: Apple increases its premium subscription from $9.99 to $10.99
- Q1 2023: Spotify announces plans to raise prices for premium plan in US and other markets
- June 2023: Spotify reports Q2 2023 earnings, with price hike expected to boost revenue
