Spotify is likely to make yet another pricing change, indicating a significant departure from its long-standing monthly fee, which may irritate its loyal users. According to Bloomberg, prices are expected to rise in several foreign countries by the end of April, followed by the US market later this year. This is following the recent monthly pricing surge from $9.99 to $10.99 in July last year. This indicates that prices are likely to fluctuate more frequently and for larger amounts.
Prices are expected to rise by approximately $1 to $2 a month in five markets, including the UK, Australia, and Pakistan, by the end of April. A subsequent increase is planned for the US, Spotify's largest market, later in the year. This is designed to cover the escalating costs of adding ebooks to Spotify's extensive library. Spotify's update attempts to compete with Audible in the audiobook industry, which is currently ranked second. Spotify's goal of offering a larger choice of content is obvious as it expands into new markets, even if it means hiking subscription prices. Currently, Spotify offers up to 15 hours of audiobook listening per month within its paid plans. While the company compensates publishers for the books, additional revenue is only generated from listeners who exceed this limit.
Spotify is going to release a "basic" plan to try to avoid any negative feedback from its users. This version keeps the current Premium price of $10.99 but doesn't include audiobooks. It's a simpler choice for people who are mostly interested in music and podcasts. This difference suggests that subscription services should be more personalized, letting users pick a plan that fits their listening tastes best without lowering the quality of the service as a whole.
In the middle of these price changes, Spotify has been hinting at a "Supremium" subscription that will supposedly provide endless streaming and other premium features. Users have recently said that a Dolby Atmos logo showed up on the app's interface. This could mean that spatial audio features are about to be released, showing that Spotify is committed to improving its members' audio experiences. Even though the company is still figuring out how to set prices correctly, this risky addition shows that it is still trying to come up with new ideas and offer more value.
Historically, Spotify has offered a free, ad-supported service with limited functionality and a paid service with unlimited access. However, the company has consistently operated at a loss since its public debut in 2018, with a significant portion of its revenue going towards royalties for the music industry. In order to become less reliant on music royalties, Spotify has added podcasts and audiobooks to its list of services. Despite these efforts, the music industry remains concerned about the potential for reduced royalties and has been pushing for price increases. Spotify's competitors, including Apple and Amazon, have also raised their prices for music services.
The company is exploring additional revenue streams, such as offering early access to new music for a premium, to cater to the most dedicated fans. However, there is a reluctance to significantly alter the core paid service. As a result, the cost of Spotify's main service is expected to rise.
Even though Spotify hasn't made an official statement about the price increase yet, it aims to find a balance between adding more material and keeping prices low for users. The next few months will likely be very important in figuring out how its global audience reacts to these changes. It remains to be seen whether these changes to Spotify's strategy will strengthen its position or cause users to rethink their subscription choices.
