Spotify eyes further subscription price hikes

According to multiple news outlets, including Bloomberg and the World Street Journal, Spotify plans to raise subscription prices in five key markets, including the UK, Australia, and Pakistan, by the end of April, with price adjustments slated for the US later this year. 

The reported changes include a $1 per month increase for Individual subscription plans, with Duo and Family plans seeing a $2 per month rise. 

The impending price hikes coincide with a notable increase in paid subscribers in 2023, prompting the company to consider further increases in pursuit of profitability  –  an objective still unmet since the company’s 2018 stock market debut. 

During a financial call last autumn, Spotify’s CFO Paul Vogel expressed satisfaction with the company’s performance, noting that the churn rate met expectations, highlighting strong revenue growth as a key factor in increased subscriptions.

In its Q1 2024 outlook, Spotify predicts attaining 618 million monthly active users, an operating income of $194m and total revenue of $3.8bn.

“A new part of the Spotify modus operandi is our focus on efficiencies,” CEO Daniel Ek has also said. “Paul [Vogel] and myself and the rest of the management team [are] constantly looking at how we can make improvements, and we’re constantly finding new ways to bring more efficiencies out of the business.”

Additionally, there’s speculation about Spotify introducing a “Supremium” tier, rumoured to provide 24-bit lossless audio and AI-generated custom playlists. 

These developments align with substantial revisions to Spotify’s royalty payout mechanisms aimed at an artist-centric model, including setting minimum stream thresholds and intensifying efforts to combat artificial streaming. Tracks must now meet a minimum stream threshold and have a minimum number of unique listeners to qualify for royalties. Additionally, Spotify will charge labels and distributors for flagrant artificial streaming. Moreover, the platform has increased the minimum track length for noise recordings to two minutes to prevent exploitation by bad actors. This move aligns with rival Deezer’s efforts to remove over 26 million tracks, including noise recordings, in a bid to prioritise valuable content and support genuine artists. 

Alongside the price adjustments, Spotify is said to be gearing up to launch a new subscription tier dubbed “Basic, which will grant access to music and podcasts but omit audiobooks, diverging from its current Premium offering inclusive of 15 hours of monthly audiobook listening time. Basic-tier subscribers purportedly face charges matching the current premium individual subscription rate of $11 per month, with extra fees applicable for audiobook usage.