As expected, Spotify has finally raised the price of its premium music-streaming subscription in the U.S. to $10.99 per month — the first such price hike since the service launched in the country in 2011.
The move comes only after months of pressure from the music industry and musicians — and seeing each of its competitors raise prices to a similar degree. On Friday, the Wall Street Journal reported that such a move was imminent.
In wording that seems oddly apologetic and reflects CEO and co-founder Daniel Ek’s long resistance to raising prices, the company made the announcement in a blog post Monday morning.
“The market landscape has continued to evolve since we launched,” it reads. “So that we can keep innovating, we are changing our Premium prices across a number of markets* around the world. These updates will help us continue to deliver value to fans and artists on our platform.
“Starting from today, existing subscribers in these markets will receive an email explaining what this means for their account. In the US, the new prices are:
Spotify — which, per its last earnings report, is the world’s largest paid music-streaming service with around 210 million subscribers — is also increasing its Premium prices in around 50 other markets, including Canada, much of Europe, and markets in Asia, South America, and Australasia. It says Premium subscribers will be “given a one-month grace period before the new price becomes effective, unless they cancel before the grace period ends”.
The move comes a day before the company’s second-quarter 2023 earnings on July 25, before the market opens.
Ek has previously said the company is considering a price increase in the U.S., following price increases by rivals like Apple Music. “When our competitors are raising their prices, that is really good for us,” he said on the company’s third-quarter 2022 earnings call in October, noting that the company had to that point raised prices more than 40 times in markets around the world.
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Last fall, Apple Music raised its subscription price to $10.99 per month for individuals, with the family plan jumping two dollars to $16.99/month, among other plan increases. Amazon Music Unlimited also raised its monthly price to $10.99 (for non-Prime members), and this week YouTube increased the price of the YouTube Music Premium plan to $10.99/month (while also raising the fee for YouTube Premium by $2, to $13.99/month).
In the first three months of 2023, Spotify gained 5 million Premium subscribers — beating its expectations — to stand at 210 million. Overall, including free, ad-supported accounts, it tallied 515 million total users worldwide. Revenue for Q1 fell short of Spotify’s guidance, which the company blamed on headwinds in its advertising business.
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