Spotify Increases U.S. Premium Subscription Price

Spotify will raise the price of its Premium subscription from $11.99 to $12.99 per month starting next month. This change impacts subscribers in the U.S., Estonia, and Latvia.

Reason for the Price Increase

The company indicated that periodic adjustments in pricing reflect the value it provides. Spotify aims to enhance user experience and support artists through these changes.

Market Reaction

On Thursday, Spotify’s shares declined by 2% during morning trading. Analysts on Wall Street have encouraged the company to consider price adjustments to stabilize revenue. Over the past six months, Spotify’s stock has dropped more than 25% amid restructuring and less-than-expected financial results.

Leadership Changes

Recently, founder Daniel Ek transitioned from CEO to executive chairman. Spotify appointed Gustav Söderström and Alex Norström as co-CEOs, with Söderström focusing on product and technology and Norström on business operations.

Ek’s New Role

Ek’s shift aligns with typical structures seen in European chairman roles. He will oversee capital allocation and contribute to the long-term vision for Spotify while supporting senior management.

Spotify’s Market Position

Founded in 2006, Spotify has established itself as a leading music streaming service, boasting 696 million users and 276 million paying subscribers across 184 markets. Its main competitor, Apple Music, has also increased its prices but often packages its service with other offerings, drawing less scrutiny of standalone rates.

Inflation Trends in Streaming Services

Recent data from the Bureau of Labor Statistics revealed a 29% rise in prices for video games and streaming subscriptions over the past year. While music streaming hasn’t seen an increase as significant, it is evident that subscription models are trending upward.