On Monday, Spotify (NYSE:SPOT) experienced an uptick of up to 4% during early trading following its announcement of intentions for another round of price hikes for its US subscription packages.
Starting in July, prices will see increments ranging from $1 to $3, as announced by the company on Monday. Among the changes, family plans will experience the most significant hike, with prices climbing to $19.99 per month from $16.99. Duo plans, catering to two users sharing an account, will see a $2 increase to $16.99. Additionally, Spotify Premium subscriptions will now cost $11.99 per month, marking a $1 monthly increase.
This move follows last summer’s adjustment of certain subscription plans, with Spotify indicating a need for periodic price updates to sustain investments in product features and innovations, ultimately enhancing user experience.
The decision to raise prices comes on the heels of Spotify’s profitability in the first quarter, where it exceeded most of its key metrics and provided optimistic guidance for higher revenue and operating income in the current quarter.
Over the past year, Spotify has embarked on a journey of price hikes, coupled with multiple rounds of layoffs and other initiatives aimed at bolstering profitability. The company has expressed a commitment to strategic investments, particularly in the competitive podcast market, while also emphasizing flexibility in subscription tiers to attract a broader user base.
During Spotify’s first-quarter earnings call in April, CEO Daniel Ek confirmed plans to introduce various subscription tiers to cater to diverse consumer preferences. Ek emphasized the company’s focus on creating value, stating that increased value creation would enable them to implement price adjustments effectively.
Spotify stock has witnessed remarkable growth, surging over 100% in the past year and experiencing a 64% increase year-to-date.
Featured Image: Megapixl
Author Faith Yakubu 
