A Spotify price increase is coming, says CEO
- Today, during an earnings call, Spotify’s CEO announced that a Spotify price hike is on the way.
- The company hasn’t revealed many details, but it’s solid confirmation that price hikes are coming.
- Spotify has already raised prices for family plans in certain markets around the world.
The music streaming service Spotify today (via TechCrunch). The company had good news: the number of active users as well as paying subscribers has increased since the end of the second quarter.
However, the company was unable to increase sales or earnings over the same period. Spotify’s stock value fell instantly. This led Spotify co-founder and CEO David Ek to comment that there will definitely be price increases on Spotify in the near future.
Spotify Price Increase: Why, When, and Where?
By raising prices, Spotify could increase its revenue without having to increase the number of active users. It will likely keep growing its user base, but it’s clear that this doesn’t always translate into higher revenue. This is the main reason why a price increase would be necessary.
Ek did not provide any details on when this might happen or in which markets. He said this: “I believe an hourly increase in value is the most reliable signal to determine when we can use price as a lever to grow our business.”
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Ek refers to whether or not users use Spotify more often every day. When they do, they are getting more value from the product and so should be okay to pay more. Given that Spotify now offers millions of podcasts and hosts dozens of exclusive shows, it could easily be argued that consumer benefits have increased.
To the extent that this could happen, it would not be surprising if the United States were included. In countries like Belgium, Switzerland, Bolivia, Peru, Australia, Ecuador and Colombia, there have already been Spotify price increases worldwide. These increases were in family plans and other multi-user plans.
The bottom line is that current Spotify subscribers should plan a price increase soon. It’s inevitable at this point.
