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Spotify on Monday announced that it’s hiking prices for Premium users in the U.S. — less than a year after its first major price increase in over a decade — as the company said it’s looking to “invest in and innovate on our product features.”
The widely expected price hike means individual Premium users on individual plans will pay $1 more ($12), while those on Duo (two-person) plans will pay $2 more ($17) and those on Family plans will pay $3 more ($20). Spotify said in its announcement that it “occasionally update[s] our prices” to “bring users the best experience.” But it’s actually only the second time in 13 years that the music streaming giant’s subscription costs have gone up.
The first price hike was introduced last July, when the Swedish company increased membership costs by an average of $1, following a wider wave of “streamflation,” as audio and video service providers such as Apple, Amazon and YouTube told subscribers to dig deeper into their wallets. Spotify CEO Daniel Ek had also been forecasting a downturn in subscribers for the third quarter last year at the time the price hikes were announced.
But this year’s increase comes as the company is on the up-and-up. Spotify saw its global Premium subscribers increase 14% to nearly 240 million in the first quarter and turned its first profit since going public in 2018. While the company may use the extra cash from its upcoming price hikes to “innovate” its product features, it may also look to continue its profit growth story. Spotify did not immediately respond to a request for comment Monday morning about what kinds of new features it’s investing in.
Spotify users are the least likely of any audio or video streaming giant to cancel their memberships, a Bloomberg analysis found just hours before the latest price increases were announced.
The company’s stock price rose 4% in morning trading, to about $309 per share.