Life is expensive right now; energy prices are rising, food prices are rising, rent is rising, and in amongst all this stress, the cost of music may go up too, with Spotify considering raising its subscription prices. In response to Apple and YouTube Premium also raising their prices, and a seven percent loss in shares, Spotify too is considering jumping on the bandwagon.
In a climate where almost every streaming site is struggling to maintain subscribers, many been trying to find ways to claw back the money. Initially, sites like Spotify revitalized the music industry which was facing an all-time low as many were resorting to illegally downloading music rather than buying CDs and vinyl. These streaming sites originally chose to keep their prices in line with what you might have paid for a Blockbuster membership, $9.99, but as years have gone by, those prices have not changed, until now.
Speaking to Variety earlier this year, Milana Lewis, CEO of the distribution and payments platform Stem, said that this lack in price increase “makes no sense.” She explained, “The price of everything else on earth is going up, and they all keep finding new ways to make subscriptions cheaper,” pointing to surveys that show people are willing to spend more money for their subscriptions.
Now, these sites are finally set to raise their prices, with Apple Music raising its price to $10.99 a month for individuals and their family plan increasing by two dollars to $16.99. YouTube is also raising its U.S Family Plan price, introducing a whopping 28 percent increase, from $17.99 to $22.99. Spotify’s co-founder and CEO Daniel Ek has said that this is something they are considering as well. In a statement reported to Variety he said, “When our competitors are raising their prices, that is really good for us,” adding that they have raised their prices in the past in the global market.
Elk discusses raising the prices in the U.S. as “one of the things we would like to do and it’s something we will (discuss) with our label partners. I feel good about this upcoming year, and what it means about pricing for our service.” He did not offer anything beyond that.
Spotify’s third quarter still beat expectations in many ways with 456 million monthly active users. Revenue increased 21 percent from the year-earlier quarter reaching three billion euros. However, ad growth, only a small part of the company’s overall revenue, has been slower recently and shares fell by seven percent after market close. It is likely that many may begrudgingly accept the price hike if artists were to be paid more in royalties than they currently are, with many artists feeling like they are getting scraps for their work whilst execs rake in the millions.