June 4, 2024, 1:06 pm | Read time: 3 minutes
Music streaming service Spotify appears to be adjusting its prices again. This would be the second time within a year. Here’s what’s known about the plans.
Spotify is one of the most widely used music streaming services in the world. Recently, the industry has experienced several shifts. Users have noticed this primarily in the prices–including at Spotify. After the Swedish company already raised its prices at the end of 2023, Spotify has now announced the next change. TECHBOOK explains the details.
The New Spotify Prices After Price Increase
The rumors of recent weeks seem to be confirmed. Initially, the price increase will affect users in the U.S. before being gradually introduced in other markets. According to the changes known for the U.S. market, Spotify is raising the prices for all its subscriptions, except the student plan, by nearly $3 per month. Applying this to prices here, the following picture emerges:
- Spotify Student: 6.99 euros
- Spotify Premium: 11.99 euros
- Spotify Duo: 16.99 euros
- Spotify Family: 19.99 euros
Thus, the cost for a Spotify subscription could rise to up to 20 euros per month. However, up to five people can use the family plan, reducing the cost to about 4 euros per person. Currently, prices are still at 10.99 euros, 14.99 euros, and 17.99 euros per month.
This is already the second time in a short period that Spotify has raised its prices. To be fair, it should be noted that at least in Germany, prices have not been significantly changed since the market launch in 2014.
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Next Spotify Price Increase on the Horizon
Why Spotify Is Raising Prices
Spotify does not mention the exact reasons for the move. However, many suspect the reason for the price increase lies in the ongoing dispute over royalties. A large portion of Spotify’s revenue flows back to rights holders. To remain economically viable, Spotify has already reduced staff and introduced a recommendation system where artists who pay are prioritized for users.
Additionally, Spotify is trying to use another loophole. According to the licensing agreement concluded in 2022, the music streaming service must pay less in royalties to rights holders if its offering is not a pure music subscription but bundled content. Therefore, Spotify already integrated a limited selection of audiobooks into its subscriptions in November.
This, in turn, has upset the Mechanical Licensing Collective (MLC). According to them, royalties from Spotify subscriptions have since dropped by nearly 50 percent. On the other hand, Spotify argues that revenues should increase in the long term because audiobooks would lead more people to subscribe.
Dispute Goes to Court
While Spotify is still negotiating with some associations, the MLC has already gone to court. The core of the argument there is that the Spotify subscription with audiobooks is not a true bundle; there hasn’t even been a price increase, despite a completely new segment being added. Now that Spotify is raising prices, it could weaken the argument. Is the price increase happening to protect Spotify from higher royalty payments?
An outcome of the trial, which is taking place in a U.S. district court, is not yet foreseeable. However, the price increase for Spotify customers is coming regardless. For new customers in the U.S., the new prices apply immediately. Existing customers will be affected starting in July.