Spotify is set to increase prices in several key markets, with the US likely to see a hike later this year, Bloomberg reports. The move marks the second price adjustment for the platform in just a year.

Initially, the price increases will affect individual users by an additional $1 per month, while duo and family plans will see a $2 monthly increase. Countries like the UK, Australia, and Singapore will be among the first to experience the changes.

Another Spotify Price Hike Coming

Last year, Spotify raised the cost of premium individual plans by $1 across various regions, responding to calls from music rightsholders urging streaming services to adjust prices.

Billboard tells us that Warner Music Group's Robert Kyncl highlighted that the cost of music subscriptions has lagged behind inflation, emphasizing the need for change.

Barclays estimated that a 10% price increase across all music subscription services could result in substantial revenue boosts for major music companies. Spotify's decision to raise prices aligns with its strategy to adapt to the evolving market landscape and continue delivering value to users and artists.

According to the RIAA, the average number of subscriptions for 2023 increased 5.7% to 96.8 million, compared to an average of 91.6 million in 2022. 

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What's Next?

In addition to the price adjustments, Spotify plans to introduce a new payment tier, priced at $11 a month, offering access to music and podcasts only. This move comes as the company aims to cover the costs of audiobooks, which were introduced as a popular service late last year.

Despite concerns from music industry partners, Spotify's expansion into various forms of audio entertainment has succeeded. The company's stock price surged following the price hikes, indicating investor confidence in the strategy.

With 602 million users worldwide, including 236 million paying customers, Spotify's decision to raise prices underscores its commitment to long-term profitability and sustainability in an increasingly competitive market.

While the exact schedule of the price increase in the US remains undisclosed, Spotify's move reflects a broader trend among streaming services to adjust prices and explore new revenue-generating opportunities.

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