In a bid to reach long-term profitability, Spotify plans to increase the price of its subscriptions in a few major markets, according to Bloomberg.
Reports suggest that the company will increase its prices by around $1-2 a month in five regions by the end of the month, including the UK and Australia. The sources, who asked not to be identified, also said Spotify will raise prices in the US later this year. This would mark the second time in under a year that the company has raised its prices.
It's also rumoured that the audio streaming giant will create a new basic subscription plan that doesn’t include audiobooks which were introduced towards the end of 2023. This new plan is slated to cost £11 a month, which is what the current premium plan costs. At the moment, Spotify offers up to 15 hours of listening to audiobooks per month as part of their paid plan and collects revenue from listeners who exceed this limit.
We expect this new payment plan to be the first of several fresh options available to users. There have been rumours of a 'Hi-Fi' tier on its way for many years now, with a Bloomberg report from last year claiming the hi-res plan is named 'Supremium' internally at Spotify. These claims were backed up by source code revealed on Reddit. When this tier will arrive is a little less clear despite the sea of rumours.
These new tiers would mark a breakaway from Spotify's two usual options: a free ad-supported service with limited functionality, and a paid listening service offering unlimited access to audio.
The company has lost money every year since 2018 when it went public. Last year, record labels and artists received more than $9 billion from $13.2 billion in total revenue, meaning Spotify paid around 68 per cent of its revenue out in royalties.
It isn't alone when it comes to raising prices though, with the biggest competition – Apple and Amazon – also raising prices on their music streaming services.
Spotify had 602 million users at the end of 2023, with 236 million of those being paying customers. We have reached out to Spotify for clarification and comment on the reports, but have not yet received a reply. We'll update this story when we do.
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