Spotify announced an increase in its monthly premium subscription price by $1, raising it to $12.99 in the United States, Estonia, and Latvia. The Swedish streaming service revealed this adjustment on Thursday, stating that the new pricing will take effect on subscribers’ billing dates starting in February 2024. Following the announcement, Spotify’s shares dipped nearly 3%.
The company has increasingly relied on price hikes to bolster its growth strategy. Last year, Spotify’s Chief Financial Officer, Christian Luiga, noted that despite raising prices in over 150 countries, there has been no significant increase in customer churn. This suggests that Spotify is focusing more on retaining its current user base rather than aggressively pursuing new subscribers.
Price Adjustment Aims to Enhance User Experience
According to Spotify, the latest price change is part of its ongoing efforts to “keep delivering a great experience” for users. The increase in revenue is expected to be reinvested into the platform, enhancing features and supporting creators. The company reported a 12% rise in premium subscribers, totaling 281 million by the end of the third quarter. Additionally, Spotify had 713 million monthly active users during the same period.
Spotify’s investment priorities include expanding user acquisition in emerging markets and diversifying content offerings. The company aims to bolster its podcast, video, and audiobook segments, competing in a crowded market that includes established players like YouTube and Netflix. Earlier this month, the platform expanded its monetization program for creators and introduced new tools for video podcasters.
Expanding Content and Features to Attract Users
In a bid to attract more users and advertisers, Spotify has also made its music videos available to premium subscribers in the United States and Canada. This move is part of a broader strategy to enhance the user experience and expand its service offerings, appealing to a diverse audience.
As Spotify continues to navigate the competitive streaming landscape, the company’s pricing strategy and content expansion will be crucial to maintaining its growth trajectory and strengthening its market position. The adjustments in pricing reflect Spotify’s commitment to ensuring a high-quality service while staying competitive in an ever-evolving industry.
