With the ongoing inflation, multiple services had to deal with an increase in their operating costs. These operating costs are being ultimately directed to the consumer, who is seeing a price hike on many streaming services. After services like Netflix, Disney+, and Prime Video went through price increases across the globe, Spotify is the latest to join this trend. The popular music streaming service which has over 200 million Premium subscribers will be a little more expensive for its users.
Spotify announced a price hike for its subscription plans for multiple countries across the world. The Premium Single will now cost $10,99 in the US. £10.99 in the UK. The Premium Student plan will raise to $5.99/€5.99 and now will reach the same price of £5.99 in the UK. The Premium Duo plan will now be $14.99/€14.99/£14.99 while the Premium Family tier will now cost $16.99/€17.99/£17.99 respectively. The new prices are already up on Spotify’s sign-up pages. The existing subscribers will get one-month grace to prepare for the price increase.
What Explains the Price Increase?
According to Spotify, there are some factors behind the decision for raising the prices. First, the evolving market landscape and the constant need for innovation to deliver value to fans and artists are the main reasons that explain the new price hike. The global economic issues and inflation probably are also affecting the company’s decision. As of now, the company did not divulge any price increase for its lossless streaming plan – the Spotify Hi-Fi.
Talking about the Music Streaming Field, Spotify is not the first to announce such a measure. Last October, Apple announce a price hike for its Apple Music service. Amazon followed in January, and Tidal and YouTube Music Premium announced increases earlier this month. In most of the cases, the core price change was the same, a $1 increase in the cost of a standard individual monthly subscription.
Back in April, Spotify CEO Daniel Ek hinted at a price hike during an earnings call. Back then, he said that his company was ready to “raise the prices”. On the occasion, was questioned: “We’re seeing the stock price benefit from strong MAU growth and improving gross margins. If this continues, does this place Spotify in a favorable position to negotiate a “win-win” outcome with the labels on any incremental price increases? He then replied:
“Yes. I don’t know that I think the stock price impacts our negotiations with our content partners. So I don’t think that has any real impact. As I tried to describe before, usually, when we’re negotiating outcomes, it’s very rare that it’s a single issue. We are negotiating with them. It’s usually — it’s a package of different things that we tend to agree on. So one can almost think of them as bilateral treaties, so you kind of have to negotiate them for a while, and there’s a lot of puts and calls into those things.
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So it’s a whole sort of set of discussions, and there’s a number of different variables that go into them. And again, I think we’re ready to raise prices. I think we have the ability to do that, but it really comes down to those negotiations.” – Daniel EK, Spotify CEO.
Earlier this week, The Wall Street Journal reported Spotify’s decision to increase its price this week.
The Comprehensive List of Countries Getting the Price Increase on Spotify
Below you can see the complete list of countries that will be affected by the price increase. You can refer to your regional Spotify website to have specific details about the new pricing. The list is vast and picks the most important markets for Spotify. The countries below have a strong user base, and the price increase may affect the popularity of the service. After all, it’s not only the companies that are suffering from financial constraints. The user is also needing to choose priorities now with the costs raising. Besides Spotify, other services like Netflix and Disney+ went through price increases. It’s becoming expensive to keep subscriptions active in most of the services.
- Andorra
- Albania
- Argentina
- Austria
- Australia
- Bosnia and Herzegovina
- Belgium
- Bulgaria
- Brazil
- Canada
- Chile
- Colombia
- Costa Rica
- Cyprus
- Denmark
- Ecuador
- Estonia
- Spain
- Finland
- France
- United Kingdom
- Greece
- Guatemala
- Hong Kong
- Croatia
- Indonesia
- Ireland
- Israel
- Iceland
- Italy
- Lithuania
- Luxembourg
- Latvia
- Monaco
- Montenegro
- North Macedonia
- Malta
- Mexico
- Netherlands
- Norway
- New Zealand
- Peru
- Portugal
- Serbia
- Sweden
- Singapore
- Slovenia
- Slovakia
- San Marino
- Thailand
- Türkiye
- United States
- Kosovo.
The Price Increase Can Affect Spotify Userbase
Spotify is one of the most popular music streaming services offering a vast catalog of music and artists. It also has some neat features to help users to find music, and build playlists and there are a lot of customization options for organizing music and building playlists for different moments. Despite all this, a price increase always brings backlash. For some users, the price increase may be a determinant factor to decide whether or not they will keep their subscription active. Are you going to remain regardless of the price increase?
Conclusion – Was It a Fair Decision?
Upon analysis, the price increase is not exactly a big surprise. After many services and companies announced similar measures, Spotify is just the latest one to join this trend. From a business perspective, we don’t think the service had much choice. After all, with the rise in operating costs, pushing this increase to the consumers is one of the most obvious directions to go. Time will tell if this will have any kind of opposite effect. However, for some users leaving is not an option. They are “too” used to the service that the only way to go is to accept the increase and adapt.
