William Simpson
Spotify subscriptions will get a little more expensive next month, as the audio streaming service plans to raise subscription prices for the second time in about two years.
Starting in July, Spotify’s Individual plan will increase from $1 to $11.99 per month and its Duo plan will increase from $2 to $16.99 per month. The family plan will increase from $3 to $19.99, while the student plan will remain $5.99 per month.
The increase will help the company “continue investing and innovating in our product features and bringing users the best experience,” Spotify said. he said in a statement on Monday,
The increase comes after Spotify in April reported a record profit of US$183 million in the first quarter of 2024, after increasing its number of monthly subscribers to 615 million, up from 515 million the previous year. During a conference call with analysts, CEO Daniel Ek said the company is focusing less on gaining subscribers and more on revenue growth.
“Next year, our focus may return to top-of-funnel user growth, but in the short term, monetization remains our top priority,” said Ek.
The Stockholm, Sweden-based company was founded in 2006 but has struggled to turn a profit since going public in 2018. The company posted an operating loss of US$81.6 million in the fourth quarter of 2023. The company increased its prices around at the same time a year ago in a move it said at the time would help “add value to fans and artists”.
During the same earnings call, Spotify interim CFO Ben Kung said that “our data shows that historical price increases have had minimal impacts on growth.”
Spotify achieved profitability after the company laid off hundreds of employees following excessive hiring during the pandemic. The company took advantage of lower funding rates between 2020 and 2021 and financed an expansion, investing heavily in employees, content and marketing, Spotify said in a blog post. publish from December.
But that expansion slowed in three rounds of job cuts, starting in January 2023, when the company cut 6% of jobs, bringing its workforce to 9,200 employees. Just four months later, it cut another 2%, or 200 employees, mainly in the podcasting division. Spotify released another 1,500 in December 2023.
Spotify has also increased prices this year in Australia, Pakistan and the United Kingdom. Its share price rose 4.5% in midday trading to $310 per share.
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