On Monday, June 3, Spotify announced a price increase for its premium plans in the United States.
Spotify explained to US subscribers that increasing the Premium price will allow them to invest more in their product offerings and new features.
In recent months, Spotify has been working to improve its profitability by reducing marketing expenditures and implementing layoffs. This shift comes after a period of heavy investment and promotional efforts to expand its user base.
Currently, Spotify Premium subscribers generate most of the company's revenue. Experts consider increasing this part of their offering a long-term investment plan.
Some also believe Spotify could further drive growth by introducing tailored subscription plans based on user preferences in music, audiobooks, and podcasts. In April, the company reported a quarterly gross profit exceeding $1.08 billion for the first time, attributing the milestone to reduced marketing spending and layoffs.
How much is Spotify per month?
With the new price adjustment, Spotify Premium's monthly cost for the individual plan will rise from $10.99 to $11.99, the duo plan from $14.99 to $16.99, and the family plan from $16.99 to $19.99
However, given these new pushes for margin profit, many are concerned that Spotify still has a free version. The music streaming giant affirms that it still offers an advertising-supported free service with limited features and a subscription-based premium service that grants access to all functionalities.
Spotify's premium subscriber base grew by 14% to 239 million, and the company anticipates reaching 631 million monthly active users by the end of the second quarter. Per Reuters, the company's shares also saw a 4% increase in premarket trading following the announcement.
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