Spotify’s cranking up subscription prices (again) as pricey royalties cut into profits
Please don’t stop the music… but feel free to stop the price hikes. Spotify subscriptions will cost more this year for some users. The Swedish streamer is reportedly set to hike monthly prices by up to $2 this month across five markets (including the UK and Australia). Spotify’s also said to be considering hikes in the US (its biggest market). The music-streaming leader has 236M paying subscribers but hasn’t posted an annual profit. Now it’s trying to:
Chord change: Spotify laid off 1.5K+ employees last year to cut costs and raised the price of its most popular US plan by $1. Execs say more hikes are on the way.
Volume up: Spotify plans to launch several new price tiers, including a “supremium” plan with higher-quality audio.
Strategy Wrapped… Spotify’s become an audio empire by spending billions to bolster its podcast biz and adding audiobooks to premium plans last year. But quality content carries a hefty bill: Spotify paid a record $9B to the music industry last year, and spends 70% of its revenue on royalties. Price hikes are a way to offset those costs. Apple Music has raised prices twice since 2022, and Amazon upped the fee of its Music Unlimited plan.
Royal beef: After TikTok and Universal Music Group failed to agree on royalty payments, TikTok removed all music from UMG artists like T. Swift and Drake.
Spotify’s tuned in to profit mode… The streamer has lost money every year since going public in 2018. But after massive splurges on deals for pods like “The Joe Rogan Experience” and “Call Her Daddy,” Spotify’s reining in spend and upping prices. It could all pay off: Spotify forecast it’ll post a profitable quarter this month.