Thursday, 18 April 2024

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Business News

Spotify to hike prices again, introduce new subscription tier (report)

Spotify confirms details of how its royalty model will change in 2024

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Last year, Spotify raised the price of its Premium service for the first time, ending more than a decade of static prices at the music streaming service.

Now, a new report says more price hikes, and a change to its pricing model, are on the way.

According to a Bloomberg report on Wednesday (April 3), Spotify plans to raise its subscription price in five markets, including the UK, Australia, and Pakistan, by the end of April, and will raise prices in the US later this year.

Individual subscription plans will rise by $1 per month, while Duo and Family plans will rise by $2, Bloomberg reported, citing people familiar with the matter.

Additionally, Spotify is reportedly planning to launch a new “Basic” tier that will offer music and podcasts, but not audiobooks. The Premium subscription comes with 15 hours of audiobook listening time per month, with additional charges for use above that amount.

The Basic tier will be priced at the current price of the premium individual subscription: $11 per month. Basic-tier subscribers will have to pay additionally for any audiobook listening time.

Spotify has been pushing into the audiobook market – dominated in many markets by Amazon’s Audible – for several years, notably with the acquisition of audiobook distributor Findaway in 2021.

The company announced the inclusion of 15 hours of audiobook time for premium subscribers last October, giving paid subscribers access to a catalog of some 150,000 books.

The results of that “so far have been strong, at least in terms of consumption,” Bloomberg reported – implying that Spotify wants to generate higher revenue from audiobook consumption.

The first of these new price hikes comes just nine months after Spotify confirmed it would raise prices on its premium subscription in dozens of markets, including the US, where the price for an individual premium subscription rose from $10 per month to $11.

The family plan shifted from $16 to $17, and news of the latest price hikes indicates it will rise to $19 per month.

Spotify’s price hike last year came after most other global music streaming services, including Apple Music, Amazon Music and YouTube Music, had increased prices on their subscription plans.

The price hikes had been a major ask of many music industry execs for some time, amid fears that, without them, margins in the music business would suffer at a time of elevated inflation.

There were concerns that a price hike would cause subscriber cancellations, but that…

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