In a significant development, Spotify, the popular music streaming giant, has finally decided to raise the prices of its single-account premium plan after a decade of maintaining steady rates. This price adjustment extends to other subscription services offered by the platform as well. For UK subscribers, the individual plan will see a £1 increase, bringing the monthly cost to £10.99. The premium duo plan will now be priced at £14.99, while the family plan will cost £17.99. However, the student plan will remain unaffected, remaining at £5.99 per month.
Notably, similar price changes are being implemented across the US, Canada, and 49 other territories. In the US, the individual plan price will rise from $9.99 to $10.99 (£8.57). The premium duo plan will increase from $12.99 to $14.99, the family plan from $15.99 to $16.99, and the student plan from $4.99 to $5.99.
This move comes as Spotify recently reported impressive growth in its user base, surpassing expectations by adding 36 million monthly active users between April and June, bringing the total to a staggering 551 million. However, the company’s pre-tax losses for the same period surged to €241 million (£207.3 million), a substantial increase compared to the €90 million loss recorded in the corresponding period the previous year. Although sales rose to €3.1 billion, it fell short of analysts’ projections of €3.2 billion.
Spotify has stated that the decision to raise prices was driven by its commitment to delivering continued value to both users and artists on its platform. The company has also assured users that they will receive a one-month grace period before the new prices take effect, during which they can choose to cancel without facing the higher fees.
In recent times, Spotify has made efforts to reduce its reliance on expensive celebrity deals and original content that had previously impacted its bottom line. As a result, deals with prominent figures like the Duchess of Sussex and Barack and Michelle Obama’s production company have come to an end.
Earlier this year, Swedish CEO Daniel Ek hinted at the possibility of price increases in 2023, expressing confidence that customers would accept the adjustments due to the ongoing value provided by the platform.
Spotify faces growing competition from various streaming services, many of which have also adjusted their subscription costs. Apple Music, Peacock, Netflix, Max, and Paramount+ are among the platforms that have recently raised their prices. Despite these changes, Spotify’s premium plans now align with the monthly rates offered by key competitors like Apple Music and Amazon Music.
Despite the price hike, Spotify remains committed to offering a free plan supported by advertising, which has played a significant role in its massive user base of 515 million active users across more than 180 markets, with around 40% of them being paying subscribers.