Spotify has hiked rates of its subscription plans in several countries for the first time since 2011 as uncertainty in global economic outlook drives the music streaming giant to boost its profits.
“The market landscape has continued to evolve since we launched. 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,” Spotify said in a blogpost on Monday (July 24).
From Monday, Spotify’s Premium Individual plan in US would cost $10.99, up from $9.99, while the Premium Duo plan has increased to $14.99 from $12.99.
The Premium Family plan will now be priced at $16.99, up from $15.99, and the Student plan will cost $5.99, up from $4.99.
Prices hiked in 54 countries
The price hike has been extended to 53 other countries, including Canada, France, the UK, Mexico, and Australia.
Existing subscribers would be notified of the changes via email and will be given a one-month grace period before the new prices take effect, “unless they cancel before the grace period ends”, Spotify said.
The move follows a similar decision taken by rival services Apple and Amazon.com and Tidal, who all increased prices this year, while YouTube increased its monthly and annual premium plans in the US last week for the first time since the subscription service was launched in 2018.
Spotify’s decision to hike subscription plans comes close on the heels of the company registering pre-tax losses of $265 million over the three months compared to a $99 m loss in the same period last year. Sales rose to $3.41 billion but missed analysts’ expectations of $3.5 billion, according to BBC.
It is due to report its results for the second quarter on Tuesday.
In January, Spotify sacked 600 people, or 6 per cent of its workforce, saying that it expanded too quickly during the COVID-19 pandemic.
Co-founder and chief executive Daniel Ek said he had been “too ambitious in investing ahead of our revenue growth”.
In an April earnings call, Ek said the company would “like to raise prices in 2023”.
“When the timing is right, we will raise it and that price increase will go down well because we’re delivering a lot of value for our customers,” Ek said.
For all the latest business News Click Here
