(CTN News) – In an uncertain economic environment, Spotify has recently raised the prices of its premium plans across several countries, including the United States, the United Kingdom and Australia, as part of an effort to increase profitability.
As a result of Monday’s move, Spotify’s US plans will have a $1 price bump per month, with a premium single plan now costing $10.99, a duo plan at $14.99, a family plan at $16.99, and a student plan for $5.99.
In recent months, Spotify has taken steps to boost margins with hundreds of layoffs and a reorganization of its podcast division, which it had built up with billions of dollars of investments over the past few years.
As a result of the price increases, streaming services, both audio and video, are under rising investor pressure to increase their profitability after years of prioritising user growth over profits.
It’s been a year of price increases for Apple, Amazon.com, and Tidal, as well as YouTube, which also took the plunge last week, increasing its prices on its monthly and annual premium plans in the US for the first time since the subscription service was launched in 2018.
A year ago, Spotify had also raised prices in 46 different countries over the past year after announcing in April that its prices would increase in 2023.
According to the announcement, the price of the plan has increased by £1 per month in the UK, to £10.99 for an individual plan, £14.99 for a duo plan, and £19.99 for a family plan.
Prices in Australia are increasing by one dollar a month for an individual, to $12.99, and by two dollars a month for a family and duo plan, to $17.99 and $20.99, respectively.
There will be a report on the company’s second-quarter earnings on Tuesday, when it reports its results for the first quarter.
During the Coronavirus pandemic, the streaming giant announced in January that it would be cutting 600 jobs, or approximately 6% of its workforce, due to the fact that it expanded too quickly.
Daniel Ek, the founder and CEO of Spotify, has stated that he has over-invested before the company’s revenue has grown.
Streaming giant Netflix has been reported to have paid $100 million (£73 million) in 2020 for the exclusive licensing rights to Joe Rogan’s podcast, whose listeners number in the millions and which has been around for almost a decade.
Additionally, it is rumored that it paid 25 million dollars to Michelle and Barack Obama in 2019 as part of an exclusive podcasting contract.
As part of its deal with a media group run by Prince Harry and his wife Meghan, the Duchess of Sussex, it reported to have paid 20 million dollars in 2020 for its deal with the media group.
After only one series was produced under the Archewell Audio production company by the couple under their contract with Spotify, that contract came to an end by mutual agreement in June.