Spotify raises US prices of its premium plans in margin push
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Spotify has been trying to boost its margins in recent months by lowering marketing spending and through layoffs.
PHOTO: REUTERS
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SAN FRANCISCO - Spotify raised prices for its premium plans in the United States on June 4, the latest step by the Swedish music-streaming service in its push to increase margins.
The company raised the prices of its individual plan to US$11.99 (S$16.15) from US$10.99 per month, duo plan to US$16.99 from US$14.99, and its family plan to US$19.99 from US$16.99, in its largest market by revenue.
Spotify has been trying to boost its margins in recent months by lowering marketing spending and through layoffs, after relying on promotions and hefty investments to drive user growth.
Shares of the company, which competes with services from Apple and Amazon.com, rose more than 4 per cent in morning trading.
“We’re increasing the price of Premium Individual so that we can continue to invest in and innovate on our product offerings and features,” Spotify said in an e-mail, which it plans to send to its subscribers in the US over the next month.
Spotify’s revenue in the US grew nearly 11 per cent to €5.23 billion (S$7.69 billion) in 2023, according to its annual report.
The company offers an advertising-supported free service with limited features and a subscription-based paid service that gives access to all its functionality, with premium subscribers accounting for most of its revenue.
Analysts expect the streaming giant could drive further growth by offering tailored subscription plans based on consumer preferences in verticals such as music, audiobooks and podcasts.
The company’s quarterly gross profit topped €1 billion for the first time in April after it reined in marketing spending.
Its premium subscribers rose by 14 per cent to 239 million, and it forecast monthly active users at 631 million for the second quarter. REUTERS
