Spotify raises prices on premium plans to boost profits
Spotify, the world’s largest music streaming subscription company, is raising its prices again for U.S. premium accounts.
The price of ad-free individual plans is going up $1 to $11.99 a month, the company said Monday. Rates for group subscriptions also increasing, with duo plans increasing $2 to $16.99 a month and family plans going up $3 to $19.99 a month.
For students, premium prices will be unchanged at $5.99 a month.
“So that we can continue to invest in and innovate on our product features and bring users the best experience, we occasionally update our prices,” Spotify said in a blog post.
Spotify opens a downtown L.A. campus with 18 podcast studios as it expands its audio and video programming.
The higher prices take place Monday for new premium users, while existing subscribers will see the increase in their bill next month.
Stockholm-based Spotify, which has a large presence in downtown L.A., offers a vast library of music, audiobooks and podcasts on its platform. The service has 615 million users, with 239 million opting to buy a premium subscription to listen to music ad-free. Those who do not want to pay can listen free with ads.
The company has been focused on increasing its profitability. The firm cut staff last year after overspending on podcast deals with influencers and newsmakers. In April, Spotify reported its largest quarterly gross profit.
Spotify said it would lay off 17% of its workforce, or about 1,500 people, as the tech downturn continues.
Spotify stock rose 5% on Monday morning to $312.07 a share.
The Daniel Ek-run audio company joins other streaming services that have increased their prices, as investors have shifted their focus to profitability from subscriber growth.
Spotify last raised U.S. prices in July.
Streaming services including Netflix, Disney+ and Apple TV+ have increased their prices, as subscriber growth has slowed from the early days of the COVID-19 pandemic.
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