Spotify Plans to Raise Premium Plan Price in US by $1

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Spotify plans to raise the price of its ad-free premium monthly plan in the United States by $1, according to the Wall Street Journal. It also could increase prices in other markets in the coming months. Spotify is the largest music streaming service, with over 210 million paying subscribers, but the company hasn’t yet made a profit. The company is working to turn the corner in 2023, and the price hike could help with that effort.

IN NOVEMBER, Spotify CEO Daniel Ek warned investors that the company would likely have to raise prices eventually. The platform raised its family plan price in several markets last year, which has helped boost per-user revenue.

The move could help Spotify compete better with Apple Music, which offers its ad-free subscription at $10 a month and has over 210 million subscribers. It could also help Spotify lure customers away from other streaming services that charge more, such as Amazon Music and Tidal.

While Spotify is the clear leader in the music streaming market, its subscriber growth has been slower than expected over the past two years. Its focus on growing users has come at the expense of profitability.

In the US, Spotify’s premium subscription costs $15 a month for one user or $16 for up to six users in a household. The company could increase that price to match the cost of Apple Music and keep its subscriber numbers up, but a big question remains over whether consumers would be willing to pay more.

Many competing factors are in play regarding raising prices, including that Spotify doesn’t offer an extensive catalog of audiobooks or video content. It is also still working to make its ad-supported service more competitive with Apple Music and YouTube Music, and it needs to find ways to generate more revenue from its free subscribers.

The company’s most recent attempt to entice more users to its paid offerings has been the introduction of a higher-quality “premium” tier, which was announced in May. Spotify Premium subscribers in select markets can listen to music in lossless format, with a new feature called HiFi that offers higher-resolution audio. Spotify hasn’t indicated when it might launch its version of HiFi. Still, if the company does, it should give the new Spotify Premium tier some competition with Apple Music.

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