On Monday, Spotify Technology increased the price of its premium plans across a few countries, including the US and the UK, as the music-streaming company looks to increase profitability in an uncertain economic climate.
The company said the market landscape has “continued to evolve” since Spotify launched, and that the changes will help the company “continue to deliver value to fans and artists,” according to a blog post.
Spotify Implements Price Increases Amidst Restructuring and Growing Investor Pressure
The premium single plan will now cost $10.99 (nearly Rs 900), the dual plan will cost $14.99 (nearly Rs 1,230), the family plan will cost $16.99 (nearly Rs 1,390), and the student plan will cost $5.99 (nearly Rs 490) as a result of the change.
With hundreds of layoffs and a restructuring of the podcast division, which it had invested billions of dollars in building up, Spotify has taken action in recent months to increase margins.
The price rises come with rising investor pressure on streaming services, both audio and video, to increase profitability after years of prioritizing user growth first.
This year, rival services like Apple, Amazon.com, and Tidal have all raised their pricing, and last week, YouTube raised the prices of its monthly and annual premium plans in the US for the first time since the launch of the subscription service in 2018.
Last year, prices were increased in 46 countries by Spotify, which indicated in April that it might do so in 2023.
The Sweden-based company is due to report its second-quarter earnings on Tuesday.
In India, Spotify Premium costs merely Rs. 7 per day for Premium Mini, however, it is just a one-time plan that only allows one mobile device to be connected at once. The Premium Individual plan costs Rs. 119 per month, the Premium Duo plan costs Rs. 149 per month, and the Premium Family plan is merely Rs. 179 per month. These three plans each provide a free trial period of one month.
The streaming giant said in January that it was cutting 600 employees, or 6% of its workforce, after conceding that it expanded too quickly during the coronavirus pandemic Co-founder and CEO Daniel Ek said he had been “too ambitious in investing ahead of our revenue growth”.
For an exclusive licensing deal with Joe Rogan, whose podcast has millions of listeners, the streaming behemoth paid an estimated $100 million (£73 million) in 2020. Additionally, it reportedly paid $25 million for an exclusive podcasting deal with Michelle and Barack Obama in 2019. This deal ended last year.
And in 2020, it agreed to a partnership with a media group led by Prince Harry and his wife Meghan, the Duchess of Sussex, for which it reportedly paid $20 million. By mutual agreement, that deal was terminated in June after the couple produced just one series for Spotify through their production firm, Archewell Audio.