Spotify $SPOT appears to be gearing up for its third price increase in three years. The Financial Times reports the music streaming service plans to increase prices for U.S. customers in the first quarter of 2026.
Music streaming price increases have come as labels seek higher royalty payments and services shift from user acquisition to increasing profits
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Spotify $SPOT appears to be gearing up for its third price increase in three years. The Financial Times reports the music streaming service plans to increase prices for U.S. customers in the first quarter of 2026.
It's still unknown how much of an increase customers could face, but the news follows an estimate by JPMorgan $JPM that a $1 per month increase could boost revenues by nearly half a billion dollars per year. Spotify has recently raised prices in a number of other countries, including the U.K. and Australia.
A $1 price increase would be in line with past subscription cost increases. In June of 2024, the company announced subscribers in the U.S. would pay an extra $1 per month for ad-free streaming, bringing the price to $11.99 per month. That follows an announcement in July of 2023, when it hiked the price to $10.99 per month.
This would only be Spotify's third price increase since it launched in the U.S. 14 years ago.
Spotify is hardly the only music streaming service to raise prices in the recent past. Pandora, early last year, increased the cost of its Premium service from $9.99 per month to $10.99 (and hiked the price of the family option by $3 per month). Amazon $AMZN, in August of 2023, bumped up the price of Amazon Music to $9.99 per month. And Apple $AAPL Music, in October 2022, raised monthly prices by $1, to $10.99.
Those price increases come as labels seek higher royalty payments and the services shift from user acquisition to increasing their profit levels. Spotify says it has been profitable for over a year.
Spotify, at the same time, is in the midst of an executive shuffle. Founder Daniel Ek announced plans to step down as CEO at the end of September. (He will remain with the company as executive chairman.) Gustav Söderström, who served as co-president and chief product and technology officer, and Alex Norström, co-president and chief business officer, were named co-CEOs of the company.
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