Spotify hikes its subscription plans in several countries for the first time since 2011

As a response to the uncertainty in the global economic outlook and a desire to boost profits, Spotify has raised its subscription plans in multiple countries for the first time since 2011.

In a blog post on Monday (July 24), Spotify stated that the market landscape has evolved since its launch, and the price adjustments are aimed at continuing innovation and delivering value to fans and artists on the platform.

The price changes affect various subscription plans in different countries. In the US, the Premium Individual plan has increased to $10.99 from $9.99, while the Premium Duo plan now costs $14.99, up from $12.99. The Premium Family plan has been raised to $16.99 from $15.99, and the Student plan is now priced at $5.99, up from $4.99. This price hike has also been implemented in 53 other countries, including Canada, France, the UK, Mexico, and Australia.

Current subscribers will be notified of the changes through email and will have a one-month grace period before the new prices take effect, unless they choose to cancel their subscription during the grace period.

Spotify’s move to increase subscription prices follows similar decisions by competitors like Apple, Amazon.com, and Tidal, all of whom raised their prices this year. Even YouTube raised its monthly and annual premium plan prices in the US for the first time since its subscription service was launched in 2018.

The decision to raise subscription plans comes as Spotify registered pre-tax losses of $265 million over the last three months, compared to a $99 million loss in the same period the previous year. Though sales increased to $3.41 billion, it fell short of analysts’ expectations of $3.5 billion.

In January, Spotify had to lay off 600 employees, which accounted for 6% of its workforce, citing overexpansion during the COVID-19 pandemic. Co-founder and CEO, Daniel Ek, acknowledged being “too ambitious in investing ahead of our revenue growth” during that time.

During an earnings call in April, Ek had mentioned that the company intended to raise prices in 2023 when the timing was right, and he believed that customers would accept the price increase as Spotify continued to provide value for them.