Spotify will reportedly raise the price of its premium plan the United States to $10.99 a month.
According to The Wall Street Journal, the music-streaming service plans to bump the price by $1 per month next week. Citing people familiar with the matter, the paper reports that the price is expected to increase in other markets over the next few months.
Spotify’s Premium plan currently allows customers to listen to any music they want ad-free and offline for $9.99 a month. Shared and Family plans run $12.99 and $15.99, respectively, at the moment, while a student plan is $4.99 per month. That Family plan got a price bump in 2021, but the price of Spotify's other plans has remained steady for years.
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3.5 Good See all (11 items)As a result, this Premium plan increase is in many ways long overdue, from a business perspective. Apple raised the cost of Apple Music from $9.99 to $10.99 in October of last year, and Amazon Music Unlimited followed suit in January, raising its price to $10.99 as well. On Thursday, YouTube Music also raised its price for an individual streaming plan to $10.99, making Spotify the only major service to still have that $9.99 price tag.
In October, CEO Daniel Ek suggested during Spotify’s earnings call that a US price increase was imminent. It's "one of the things we would like to do,” he said at the time, “in light of...recent developments with our label partners.”
On the call, Ek also noted that the company has “the lowest churn of any competitor,” meaning that Spotify users tends to stay with the company, and he feels that raising prices likely would’t cause many customers to leave the service.
While $1 a month is a small increase for customers, Spotify stands to dramatically raise its profits with the increase. On a call with investors in May, Warner Music Chief Executive Robert Kyncl noted that a $1 price increase in the US would bring Spotify $1 billion in additional revenue.