In a strategic move aimed at improving profitability amidst an uncertain economic climate, Spotify Technology has increased prices for its premium plans in various countries, including the United States and the United Kingdom. With a focus on strengthening margins, the music-streaming company has implemented a $1 price hike for its US plans. As a result, the premium single plan now starts at $10.99, the duo plan at $14.99, the family plan at $16.99, and the student plan at $5.99.
The price adjustments come as Spotify undertakes significant measures to boost margins, including streamlining operations through hundreds of layoffs and restructuring its podcast unit, which had been built up with substantial investment. With streaming services, both audio and video, facing mounting pressure from investors to enhance profitability after years of prioritizing user growth, Spotify’s move aligns with industry trends. Rivals like Apple, Amazon, and Tidal have also increased prices this year, while YouTube recently raised prices for its monthly and annual premium plans in the US for the first time since the service’s 2018 launch.
Spotify had previously indicated its intention to raise prices in 2023 and had already implemented price increases in 46 countries last year. As the Sweden-based company prepares to report its second-quarter results, its shares saw a 5% decline on Monday. By adjusting premium plan prices, Spotify aims to navigate the evolving economic landscape and continue offering quality services to its global user base.
