Spotify Raising Subscription Prices

Facts

• Music streaming service Spotify announced on Monday it will be raising prices by $1 or $2 across its four subscription plans in more than 50 markets.¹
• Spotify followed its price hike announcement by reporting Tuesday that it beat expectations for monthly active users and subscribers in the second quarter. It also announced revenue of $3.51B, which analysts said came in below predictions.²
• In a blog post about the price hike, the company said that the increases are necessary to “keep innovating” and “continue to deliver value to fans and artists” on the platform.¹
• Subscribers to the ad-free premium plan will now pay $10.99 after a one-month grace period. Family and student plans also increased by $1, while the Duo plan increased by $2.³
• After Spotify’s first price hike of its premium service since 2011, the cost of Spotify Premium is now equal to that of competitors Apple Music and Amazon Music, which along with Peacock, Netflix, Max, and Paramount+, have also recently raised subscription prices.⁴

Sources: ¹USA Today, ²Reuters, ³CNN, and ⁴BBC News.

Narratives

• Narrative A, as provided by Guardian. Spotify is attempting to prove it’s agile enough to meet the demands of Wall Street, which is now more interested in seeing streaming services move toward profitability rather than just expand their user base. This unsurprising price hike, along with other cuts and moves Spotify has made, should put it on the road to eventually turning a profit.
• Narrative B, as provided by Forbes. Spotify can’t gloss over its dreadful earnings call. In the face of staggering losses, it’s now desperately raising prices. Since the peak of the pandemic, Spotify hasn’t come close to duplicating the earnings it produced while people were cooped up, and based on the stock market's opinions of the streamer, Spotify has a deep hole to dig out of.