Audio streamer Spotify said on Monday that it is raising the prices of its Premium plans.
In the United States, the company’s Premium Single plan will now be $10.99, up from $9.99. The cost of a Premium Duo plan, which allows for two accounts, will rise from $12.99 to $14.99, while a Premium Family plan that provides up to six accounts was priced at $16.99, up from $15.99. The price for Premium Student was also bumped up to $5.99 from $4.99.
“The market landscape has continued to evolve since we launched,” Spotify said in a statement. “So that we can keep innovating, we are changing our Premium prices across a number of markets around the world. These updates will help us continue to deliver value to fans and artists on our platform.”
Spotify is also increasing prices across several other countries, including Mexico, Canada, United Kingdom, France, Australia, Brazil, among others.
The Sweden-based company claims it has more than 200 premium subscribers, and they “will be notified via email and given a one-month grace period before the new price becomes effective, unless they cancel before the grace period ends.”
Spotify will also continue offering a free plan, which includes ads and limited features.
Rival services from Apple, Amazon, and Tidal have all increased prices this year, while YouTube also hiked prices last week on its monthly and annual premium plans in the United States for the first time since the subscription service was launched in 2018.
The price increases come at a time when streaming services, both audio and video, are under rising investor pressure to boost profitability after years of prioritizing user growth.
Spotify had indicated in April that it would raise prices in 2023, and had also raised prices in 46 countries last year.
“We’re just really trying to focus on how can we optimize for growth,” CEO and Spotify co-founder Daniel Ek said during an April earnings call, “We’re thinking about how to increase growth, and the industry realizes that, and our label partners realizes that as well.”
The audio streamer has moved in recent months to boost margins with hundreds of layoffs and a restructuring of the podcast unit, which it had built up with billions of dollars in investment.
After laying out plans last year to get 1 billion users by 2030 and to reach $100 billion of revenue annually, Spotify has been growing rapidly, but its costly expansion into podcasts and audiobooks has hit margins.
The number of monthly active users rose to 551 million in the second quarter, beating Spotify’s guidance and analysts’ forecast of 526.8 million.
Premium subscribers, who account for most of the company’s revenue, rose 17 percent, to 220 million, topping estimates of 216.6 million, according to IBES data from Refinitiv.
“If we have user growth, the revenue growth eventually comes—that’s the lesson been learned at Spotify, and we have seen it over and over,” Mr. Ek said.
Spotify expects premium subscribers to reach 224 million this quarter and revenue of €3.3 billion. Analysts were expecting subscribers of 222.4 million and revenue of €3.40 billion.
In June, Bloomberg reported that Spotify is working on a new subscription plan that will give users access to higher-quality “lossless” music. Bloomberg noted that Spotify plans to introduce that feature in the United States in October if things go well in other markets.
Reuters contributed to this report.
From The Epoch Times