Spotify Raises Premium Price for Second Time in One Year
By Movieguide® Contributor
Spotify has once again raised its price for its premium subscription.
For the second time in one year, “Spotify Premium Individual plan is increasing by $1, from $10.99 to $11.99 per month, according to the company’s updated price listings. The Premium Family plan, which provides access for up to six members a household, is going up by $3, from $16.99 to $19.99 per month,” Variety reported.
This price increase comes as no surprise.
Per the New York Post, “Spotify has been trying to boost its margins in recent months by lowering marketing spending and through layoffs, after relying on promotions and hefty investments to drive user growth.”
Subscribers will receive an email stating, “We’re increasing the price of Premium Individual so that we can continue to invest in and innovate on our product offerings and features.”
When FOX Business asked Spotify for a statement, the company pointed back to its press release, emphasizing its plan to “continue to invest in and innovate on our product features and bring users the best experience, we occasionally update our prices.”
Spotify CEO, Daniel Ek, revealed that the company often looks at the “value-to-price” ratio by evaluating what customers receive in their subscription plan and how much they pay each month.
“We’re constantly looking at how much value we’re adding, how consumers are responding…and what is the fair price to have a good value-to-price ratio,” Ek told Variety.
Despite the first price increase in July 2023, “Spotify’s revenue in the US grew nearly 11% to 5.23 billion euros ($5.69 billion)” last year, the New York Post reported.
After the first quarter of 2024, Spotify confirmed it hosts “239 million Premium customers worldwide” and has “615 million listeners (free and paid) worldwide.”
Movieguide® previously reported on Spotify:
The Mechanical Licensing Collective (MLC) filed a lawsuit against Spotify after the streamer announced a new music-audiobook bundle that would result in lower royalties.
“On March 1, 2024, without advance notice to the MLC, Spotify unilaterally and unlawfully decided to reduce the Service Provider Revenue reported to the MLC for Premium by almost 50 percent, by improperly characterizing the service as a different type of Subscription Offering,” the lawsuit stated. “[This resulted in] underpay[ed] royalties, even though there has been no change to the Premium plan and no corresponding reduction to the revenues that Spotify generates from its tens of millions of Premium subscribers.”
“The MLC believes that Spotify’s position does not comply with applicable law and regulations,” the group continued. “[The MLC] has statutory authority to address Spotify’s noncompliance with its royalty payment obligations. The MLC is taking legal action to enforce these obligations and ensure that Spotify pays all royalties due from its use of songs on Premium plans.”
Spotify launched the audiobook leg of the company last fall, offering paid subscribers 15 hours of free content before requiring users to purchase more hours.
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