Spotify has announced that it is increasing the prices of its premium plans, which confirms reports that began to emerge over the weekend.

Price Increase Across Various Markets

The music streaming giant, which claims to have over 500 million users worldwide, 40% of whom are premium subscribers, revealed that its main ad-free premium subscription plan will increase from $9.99 per month to $10.99 in the US. Additionally, its Duo plan will increase by $2 to $14.99, the family plan increases by $1 to $16.99, and the student plan increases to $5.99 each month.

This subscription increase is not limited to the US market. Spotify confirms that it will also increase prices in dozens of markets, including the European Union (EU), the United Kingdom, and parts of South and Central America, Asia, and Oceania. However, the company has not yet confirmed specific pricing for these markets.

EU customers are likely to see their main premium plan prices increase by a single euro to €11.99 per month, while UK listeners will likely see their premium subscriptions increase by £1 to £10.99 per month.

First Price Increase in Key Markets

This price increase is notable as it marks the first time Spotify has changed its basic premium pricing plan in many of its core markets, including the US and much of Europe. In contrast, streaming counterparts like Netflix have regularly updated their price levels over the years. Last October, Apple increased its premium subscription for Apple Music from $9.99 to $10.99, positioning Spotify’s new pricing in line with its main music streaming rival.

Revenue Increase and Stockholder Satisfaction

Today’s announcement comes just a day before Spotify reports its Q2 2023 earnings. The price increase is an obvious conduit for the Swedish company to increase revenue as it drives toward sustained profitability. By increasing prices, Spotify aims to keep its shareholders happy and maintain its position as a global leader in the music streaming industry.

The Future of Spotify

While this price increase may cause some backlash among users, it also signifies potential developments in Spotify’s offerings. Earlier this year, reports circulated that Spotify is working on a new subscription plan that will provide users with access to higher quality “lossless” music. This plan is expected to launch in the US later this year with a tentative price of $19.99 per month.

An Expanding Competitive Landscape

The increase in subscription prices from Spotify and Apple is indicative of a broader trend in the streaming industry. As streaming platforms continue to invest heavily in content creation and licensing, their costs inevitably rise. To remain competitive and sustain profitability, these platforms must pass some of these costs onto consumers.

Streaming services like Spotify and Netflix have experienced immense growth and success over the past decade. However, as these platforms mature, price increases become necessary for long-term viability and to support ongoing investments in technology, partnerships, and exclusive content.

Conclusion

Spotify’s decision to increase the prices of its premium plans mirrors the actions of industry competitors like Netflix and Apple. By aligning its pricing with Apple Music, Spotify aims to remain competitive in the music streaming market while generating increased revenue to support its growth and development. While users may have mixed reactions to the price increase, Spotify’s future plans for a higher-quality music subscription plan indicate that the company is proactively working to enhance its offerings and meet the evolving needs of its broad userbase.