OAN’s Brooke Mallory
10:58 AM – Wednesday, June 5, 2024
Next month, Spotify subscribers can expect an increase in membership fees as the audio streaming service is planning to boost its rates for the second time in less than a year.
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Spotify’s individual plan will increase to $11.99 per month starting in July, while its duo plan will increase to $16.99 per month. The student plan will continue to cost $5.99 per month, while the family plan will rise to $19.99.
The company claims that the price increase will help it “continue to invest in and innovate on our product features and bring users the best experience.”
Additionally, the increase follows Spotify’s announcement in April of a record-breaking $183 million profit for the first quarter of 2024, following the company’s growth from 515 million to 615 million monthly users.
CEO Daniel Ek stated that the company is concentrating more on revenue growth and less on subscriber acquisition during an earnings call with analysts.
“Next year, our focus may return to top-of-the-funnel user growth, but in the near term, monetization remains our top priority,” Ek stated.
The Stockholm, Sweden-based business was established in 2006, but after going public in 2018, it had difficulty turning a profit, up until recently. In the fourth quarter of 2023, the company reported an operating loss of $81.6 million. About this same time last year, the company announced a pricing increase that it said would help “deliver value to fans and artists.”
Ben Kung, interim chief financial officer of Spotify, claimed during the same earnings call that “our [Spotify’s] data shows that historical price increases have had minimal impacts on growth.”
In a blog post published in December, Spotify stated that the company had financed an expansion by taking advantage of reduced borrowing rates between 2020 and 2021 and making significant investments in staff, content, and marketing.
This year, Spotify also increased its costs in the UK, Pakistan, and Australia. In midday trading, the stock price increased by 4.5% to $310 per share.
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