Spotify plans to raise prices this year and introduce new plans
Spotify is preparing a revamp of its plans and prices, according to a new report from Bloomberg. This will include price hikes in a few major markets, and there will also be a new plan that doesn"t include audiobooks.
The prices will go up by about $1 per month for individual plans to $2 per month for the family plans and duo plans in the UK, Australia, Pakistan, and two other unnamed markets, the report says. In the US, its largest market, a price hike is coming "later this year", according to "people familiar with the matter".
The higher pricing will allegedly help cover the cost of audiobooks, which Spotify has recently started offering. Spotify subscribers get up to 15 hours of audiobook listening per month. But of course the company needs to pay publishers of the audiobooks for all that listening time it"s offering for "free", even though so far it"s only made money for audiobooks from listeners who exceed the aforementioned limit.
Spotify is also apparently going to introduce a new plan that will offer only music and podcasts, without audiobooks. This will be priced the same as its current individual premium plan. Users of this upcoming tier will have to pay for audiobooks. So basically, it goes like this: first, Spotify adds audiobooks to the existing premium plan, then it hikes its price up but launches a new plan that is identical sans audiobooks.
It all seems designed to hook people on the premium plan into audiobooks thus getting them to stay on this plan even when the price gets bumped, whereas those who don"t care about audiobooks will need to jump through the extra hoop of switching plans whenever the new one launches.
But wait, there"s more. A "supremium" plan (seriously) is coming too, giving you access to high-fidelity audio, "among other features" that aren"t detailed. This has been rumored for years, so maybe it"s finally dropping in 2024?
Spotify has recently been looking (almost to a desperate level, it would seem) to diversify from offering just music, since it"s paying record labels and artists about 70% of its revenue. Thus, its podcast push was born a few years ago, and recently we got audiobooks. But this ironically has alarmed its partners in the music industry, who now fear they will be getting less money from Spotify. And their reaction to that fear has allegedly been pushing Spotify to raise prices.
Last year, Spotify hiked its prices for the first time since introducing its premium tier, and the move seems to have had no detrimental effects whatsoever, as its userbase grew by 113 million - the best growth it"s ever seen. At the end of 2023, Spotify had 602 million total users, of which 236 million were paying customers. The success of last year"s price hike has given the company"s management the confidence to do it again.
