Spotify raises premium subscription price for millions for the first time on its single account premium plan. This is the first time it has raised prices since 2011 and it is also hiking other services as well.
In the UK, subscriptions will rise by £1 a month to £10.99 for an individual plan, £14.99 for a premium duo plan and £17.99 for a family plan.
The price of a student plan remains unchanged at £5.99.
It follows other streaming services which have also increased subscription costs.
Similar price hikes also apply to the US, Canada and 49 other territories.
In the US, the cost will go up from $9.99 to $10.99 (£8.57) for those with an individual plan.
The premium duo service will increase from $12.99 to $14.99, the family plan from $15.99 to $16.99, and the student plan from $4.99 to $5.99.
In its latest financial results, Spotify said that it beat forecasts by adding 36 million monthly active users between April and June. This takes the total to 551 million. Of those, 220 million pay for subscriptions.
However, the company’s pre-tax losses swelled to €241m (£207.3m) over the three months compared to a €90m loss in the same period last year. Sales rose to €3.1bn but missed analysts’ expectations of €3.2bn.
Spotify’s chief executive Daniel Ek said the company had a “very strong quarter”, although its share price dropped by more than 11% after it revealed its results.
Mr Ek spoke about the role that Artificial Intelligence (AI) might play in the future. This could be summarising lengthy podcasts or helping to lower the cost and difficultly of producing audio advertisements.
In February, Spotify unveiled its “AI DJ”, which it billed as a personalised “DJ in your pocket” that would deliver “a curated line-up of music alongside commentary”.
On Monday, Spotify said it was raising prices “to help us continue to deliver value to fans and artists on our platform”.
Spotify said users “will be given a one-month grace period before the new price becomes effective, unless they cancel before the grace period ends”.
The music giant cut 6% of staff in January, citing a need to improve efficiency.
Spotify has been reducing its reliance on the big celebrity signings and expensive original content that have weighed on its bottom line. Once of these high profile casualties being the Duchess of Sussex’s podcasts.
In 2020, Meghan and Prince Harry signed an exclusive deal reportedly worth about $20m.
That ended last month after the duke and duchess’s Archewell Audio parted ways with Spotify in what was said to be a mutual decision.
A deal with Barack and Michelle Obama’s production company also ended last year.
In an April earnings call, Mr Ek said the company would “like to raise prices in 2023”.
“When the timing is right, we will raise it and that price increase will go down well because we’re delivering a lot of value for our customers,” Mr Ek said.
The company had already raised prices of US family plans and UK student, duo, and family plans in 2021. Individual subscriptions were previously unaffected.
The new Spotify Premium cost matches the monthly plans of competitors Apple Music and Amazon Music.
The company will continue to offer a free plan that includes advertising.
News Source: BBC News