Spotify is considering raising prices for its Premium music streaming plan in the US, according to a recent report in entertainment industry daily Variety. The news emerged from an earnings call with Spotify CEO Daniel Ek where the company announced a boost in paid subscribers by 7 million users, along with 20 percent total active monthly user growth, during the third quarter of 2022.
Despite the gain in both subscribers and total active monthly users – Spotify’s largest to date for the period – the company also reported an operating loss for the quarter, an announcement that triggered a sharp subsequent drop in its stock value.
Spotify’s price hike for its paid premium subscription is a move that now seems likely given Ek’s comment – as reported in Variety – that an increase “is one of the things we would like to do and it’s something we will [discuss] with our label partners. I feel good about this upcoming year, and what it means about pricing for our service.”
The anticipated increase is apparently aimed only at the US market, which has seen stable $9.99 per month pricing for Spotify Premium since the service’s early days. A number of formidable competitors have emerged since that time, however, including Apple Music, which just announced its own first price increase from $9.99 / £9.99 to $10.99 / £10.99.
Streaming prices – going up!
Apple isn’t the only streaming service to raise its prices in recent weeks, with Google having just hiked the price of its YouTube Premium Family plan, one that provides ad-free viewing and listening along with downloads, from $17.99 to $22.99 per month. Both moves follow price increases earlier this year from Netflix for its Standard and Premium service tiers, Hulu for its ad-supported and ad-free streaming tiers, and Disney for its ad-free tier, which will see a price hike starting in early December.
Spotify was already too expensive
Spotify’s quarterly triumphs and tribulations aside, it currently occupies a low position on our list of the best music streaming services, coming in fourth place behind Tidal, Apple Music, and Amazon Music Unlimited.
A big reason for its number four ranking is poor value as compared to the other music streamers. Unlike the top three, Spotify doesn’t offer music in a high-res or Spatial Audio format. It also streams using lossy compression, even for its paid Premium subscription tier, while those other services stream in lossless CD-quality for around the same $9.99 / £10.99 price.
Spotify is said to be readying a high-res “Platinum” service tier, one that would offer lossless and high-res music streaming for $19.99 per month, and the price hikes for its current Premium plan could very well coincide with that launch – should it happen at all.
A $19.99 per month high-res Spotify tier would put it on the same pricing level with Tidal. But Apple Music and Amazon Music Unlimited currently offer lossless and high-res streaming as part of their base streaming subscription, which costs around half the amount in both instances as the new Spotify tier will. And while extra features such as limited-ad podcasts will apparently accompany the Spotify Platinum plan, there have been no reports of Spatial Audio coming to the platform.
To effectively compete with other services, Spotify would need to add high-res audio and other features while maintaining its current $9.99 per month subscription cost, or possibly capping it at the same $10.99 per month that Apple now charges for Apple Music.
Otherwise, Spotify will be too expensive for what you get – something that has been the case for a very long time.
