It’s finally happened. After reports last month that Spotify had sent out a survey to consumers in the UK to test their appetite for potential subscription charge increases in the market, the music streaming company has now made its plans official.
SPOT is set to raise prices for its Premium Duo, Premium Family and Student plans in the UK and Europe from the end of this month for new users and starting from June 2021 for existing subscribers.
Not only that, but, according to the Verge, Spotify will also be raising the monthly price of Premium Family in the US from $14.99 to $15.99.
Spotify’s Premium Individual subscription price does not appear to be going up in the US, UK or Europe at this stage.
Android Police reported earlier today that users in the UK and Europe have been sent emails informing them of the increases, while The Verge additionally reporting that users in the US and ‘some countries in Asia and South America will also see similar price increases’.
The email sent out to users in the UK reads: “Hi, starting April 20, 2021, we’re increasing the price of Premium Duo so we can continue to bring you new content and features that you can enjoy both as a couple and as individuals”.
“The price of Premium Duo will change from £12.99/month to £13.99/month. Since you’re already a Premium Duo subscriber, we’re giving you one additional month at the current prince. This means the new price will become effective on your June billing date.”
Spotify’s Student subscription will go up by £1 from its current price of £4.99 per month to £5.99, while Duo, as stated above, will increase from £12.99 to £13.99.
Spotify Premium Family will go up by £2, from £14.99, to £16.99 per month.
SPOT’s UK price survey last month for the Premium Individual, Duo and Family plans noted higher prices of £10.99, £14.99 and £19.99, respectively, which means that the soon-to-be higher Family Plan price will actually be £2 lower than what the test suggested.
In Europe, including Ireland and ‘a handful’ of other countries according to the Verge, Student plans will increase to €5.99 (currently €4.99) and Premium Duo will increase by €1 to €12.99 per month.
The Family plan will go up €3 to €17.99 per month (currently €14.99).
“We offer a variety of subscription plans tailored to our users’ needs, and we occasionally update our prices to reflect local macroeconomic factors and meet market demands while offering an unparalleled service.”
A Spotify spokesperson told the Verge: “We offer a variety of subscription plans tailored to our users’ needs, and we occasionally update our prices to reflect local macroeconomic factors and meet market demands while offering an unparalleled service.”
The impending increases outlined above follow comments made by Spotify Chairman & CEO Daniel Ek on the company’s Q4 2020 analyst call in February in which he confirmed that price rises will become part of the music streaming platform’s growth strategy going forward.
SPOT reported in its Q4 investor update in February that it raised the price of the Family Plan in seven markets in October 2020, including Australia, Belgium, Switzerland, Bolivia, Peru, Ecuador, and Colombia (alongside Duo in Colombia) and that early results of the increases in those markets are positive, having seen “no meaningful impacts to churn or customer intake in these markets.
Ek also told investors on the company’s Q4 2020 analyst call that “there are three legs to the stool” of how Spotify can achieve growth and explained: “One, we can improve our product proposition. Two, we can launch in new markets and three, we can raise prices.”
He added: “We’re trying to optimize for growth and there’s three ways to grow. We’re now adding the third part of the stool here as well, but I don’t think you should read into that, that growth has peaked. It is more that we’re now flexing our muscles and adding that third part, too.”
SPOT ‘tested’ 10% price increases for its standard Premium, Student and Premium Family Plans In Norway in July 2018 and those prices have remained 10% higher ever since.Music Business Worldwide