Spotify to increase subscription prices next year
What's the story
Spotify is reportedly planning to raise its subscription prices in the United States during the first quarter of next year. The move will be the first price hike by the music streaming platform since July 2024. The decision comes after similar adjustments were made in other regions and amid pressure from record labels over inflation-related costs.
Pricing history
Previous price adjustments and market pressures
Spotify raised its subscription prices in the US last in July 2024. The company has already hiked prices in other markets such as the UK, Switzerland, and Australia. The upcoming US price hike is especially important due to the country's market size and pressure from record labels which argue that music subscriptions are still cheaper than video services like Netflix.
Subscription details
Current subscription costs and inflation concerns
Spotify's subscription service was launched in the US at $9.99 per month, but it now costs $11.99 monthly. Record labels have been urging Spotify, Apple Music, and other platforms to raise their subscription prices due to rising inflation rates. The potential price hike comes as Spotify is also undergoing a leadership transition with co-founder Daniel Ek stepping down as CEO and Alex Norstrom and Gustav Soderstrom taking over as co-CEOs next year.
Strategic approach
Spotify's market strategy and financial projections
Spotify has relied on price hikes in recent years to boost its earnings, confident that its widespread presence will keep users loyal. The company raised the cost of its premium individual plan in over 150 markets in Q3. Earlier this month, Spotify forecasted a fourth-quarter profit above Wall Street expectations, banking on strong user growth and the impact of price hikes during the holiday season.