The recent news of Spotify planning to increase prices for its premium subscription service has caused a stir in the market, with shares jumping by 6% on Wednesday. This move comes as the company’s second price hike within a year, signaling a shift in the company’s pricing strategy.
According to a Bloomberg report, Spotify is set to raise monthly prices by about $1 to $2 in five markets, including the U.S., United Kingdom, Australia, and Pakistan. The price hike is expected to take effect by the end of April, with the aim of helping the company cover the costs of its new audiobook service.
New Subscription Plans on the Horizon
In addition to the price increase, Spotify plans to introduce a new basic subscription tier priced at $11 per month, which will include music and podcasts but not audiobooks. This new tier is part of a series of newly priced subscription plans that the company intends to roll out in the near future.
Spotify, a Swedish music-streaming company, has faced challenges in achieving profitability over the years, despite competing with giants like Apple, Amazon, and YouTube in the streaming industry. The decision to raise prices may be a strategic move to boost revenue and enhance the company’s financial performance.
Overall, the market response to Spotify’s price hike suggests that investors are optimistic about the company’s ability to monetize its services effectively. However, it remains to be seen how consumers will react to the increased subscription prices and whether Spotify can maintain its competitive edge in the crowded streaming market.