Spotify raising premium plan prices in US to try to stay profitable

Jump to First Reply
AppleInsiderAppleInsider
Posted:
in Apple Music

After years of on-again off-again profits and losses, Spotify is raising its subscription price for U.S. subscribers by $1 in hopes of staying in the black.

Credit: Spotify
Credit: Spotify



While the change hasn't been announced yet, the cost of Spotify's ad-free premium plan will jump to $10.99 monthly, up from $9.99 monthly for U.S. subscribers. This marks the company's first price hike since its introduction.

However, the company's inability to remain profitable and increased pressure from investors and music executives has made the price hike all but inevitable.

According to The Wall Street Journal, the price hike is expected to be announced the week of July 24. The company will likely raise prices in other markets in the coming months.

Apple Music raised the cost of an individual subscription from $9.99 to $10.99 in October. Amazon Music Unlimited, Amazon's all-you-can-play music streaming service, is $8.99 for Prime subscribers or $10.99 for non-Prime subscribers.

In July, Spotify announced that it would cut off any remaining customers paying for their Spotify Premium subscriptions via the App Store.

Spotify remains the most used streaming service in the U.S., with 44.4 million paid subscribers. Apple Music holds the second-place position with 32.6 million paid subscribers.

Read on AppleInsider

Comments

  • Reply 1 of 14
    red oakred oak Posts: 1,110member
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 
    jfabula1chasmwilliamlondonpulseimagesBiCCwatto_cobraFileMakerFeller
     7Likes 0Dislikes 0Informatives
  • Reply 2 of 14
    chasmchasm Posts: 3,724member
    red oak said:
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 
    Meanwhile, Apple Music doesn’t break out its figures, but given the overall incredible growth and profitability of Apple’s Services division, I’m guessing its not that kind of a money-loser. Indeed, it’s incredibly unlikely to be losing any money at all at this point, despite paying more to artists than Spotify does.

    Possibly that’s because the team running it are not becoming billionaires off the back of a single product — but that’s just speculation on my part.
    williamlondontmayAlex_Vlolliverwatto_cobraFileMakerFeller
     6Likes 0Dislikes 0Informatives
  • Reply 3 of 14
    BiCCbicc Posts: 59
    red oak said:
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 

    That is a fun fact!!!!!!! I read that to the misses and she spat out her drink!!!! Thank you for sharing.  Losing half a billion is a pretty big hit!!! Ouch. 
    red oakwilliamlondonwatto_cobra
     2Likes 0Dislikes 1Informative
  • Reply 4 of 14
    red oakred oak Posts: 1,110member
    chasm said:
    red oak said:
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 
    Meanwhile, Apple Music doesn’t break out its figures, but given the overall incredible growth and profitability of Apple’s Services division, I’m guessing its not that kind of a money-loser. Indeed, it’s incredibly unlikely to be losing any money at all at this point, despite paying more to artists than Spotify does.

    Possibly that’s because the team running it are not becoming billionaires off the back of a single product — but that’s just speculation on my part.
    My guess is it’s profitable, but with gross margins - 20%.  Much lower than the 70% overall Service margin 



     0Likes 0Dislikes 0Informatives
  • Reply 5 of 14
    BiCCbicc Posts: 59
    chasm said:
    red oak said:
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 
    Meanwhile, Apple Music doesn’t break out its figures, but given the overall incredible growth and profitability of Apple’s Services division, I’m guessing its not that kind of a money-loser. Indeed, it’s incredibly unlikely to be losing any money at all at this point, despite paying more to artists than Spotify does.

    Possibly that’s because the team running it are not becoming billionaires off the back of a single product — but that’s just speculation on my part.

    I like your speculation.  But here is the deal.  Everyone I know owns the CD or goes to Youtube or we simply listen to FM Radio.  Especially house parties it's all Youtube and that guy that plays DJ - Heavy Metal and the girls start to get pissed so we have to forcefully take away the remote and everyone laughs.  I love Megadeath but the girls start to get pissed, and it goes straight to gangster rap.  I can't make this up.  Hey everyone have you noticed for the longest time we go from Metal to Gangster Rap.  Thats why we keep on coming Dummy.
    williamlondon
     0Likes 0Dislikes 1Informative
  • Reply 6 of 14
    foregoneconclusionforegoneconclusion Posts: 2,981member
    Article linked below is an interesting take on streaming in general, i.e., it constitutes magical thinking when it comes to the business side. 

    "In the end, the answer is immaterial. Silicon Valley's invasion of Hollywood brought with it science fictional notions of growth for the industry, a penchant for secrecy and unaccountability and the expectation that it could get away with treating workers like robots or invisible code."

    https://www.gwinnettdailypost.com/entertainment/tv/brian-merchant-hollywood-is-on-strike-because-ceos-fell-for-silicon-valleys-magical-thinking/article_d50488a0-3d45-5244-8606-22b259422252.html#
    Oferwatto_cobraFileMakerFeller
     3Likes 0Dislikes 0Informatives
  • Reply 7 of 14
    Aladickaladick Posts: 4member
    Meh.  Another $1 a month isn't a biggie for me.  I'll keep it.  I use Spotify and SiriusXM almost exclusively anymore.  I don't like YouTube or any of the freebies outside of those two platforms. Just my preference though.
    williamlondonJaphey
     1Like 0Dislikes 1Informative
  • Reply 8 of 14
    macxpressmacxpress Posts: 5,979member
    chasm said:
    red oak said:
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 
    Meanwhile, Apple Music doesn’t break out its figures, but given the overall incredible growth and profitability of Apple’s Services division, I’m guessing its not that kind of a money-loser. Indeed, it’s incredibly unlikely to be losing any money at all at this point, despite paying more to artists than Spotify does.

    Possibly that’s because the team running it are not becoming billionaires off the back of a single product — but that’s just speculation on my part.
    Apple Music doesn't necessarily need to make a profit as it has other things to offset the losses such as things like AirPods for example which people will buy to listen to Apple Music. Spotify has music....and they have, well music and thats not making money for them. 
    watto_cobra
     1Like 0Dislikes 0Informatives
  • Reply 9 of 14
    RudeBoyRudyrudeboyrudy Posts: 106member
    Regardless of the financial state of Spotify. It runs circles around Apple Music. Just a better recommendation and playlist experience.


    williamlondonOferJapheygrandact73
     3Likes 0Dislikes 1Informative
  • Reply 10 of 14
    Appleishappleish Posts: 758member
    Worth it now that they've launched Spotify HiFi!  Oh wait...
    williamlondonwatto_cobraSpitbath
     3Likes 0Dislikes 0Informatives
  • Reply 11 of 14
    StaceyMJ_8611staceymj_8611 Posts: 3member
    I’ll stick with my free Apple Music subscription which I love by the way. 
    williamlondonwatto_cobraSpitbath
     3Likes 0Dislikes 0Informatives
  • Reply 12 of 14
    Oferofer Posts: 278unconfirmed, member
    RudeBoyRudy said:
    Regardless of the financial state of Spotify. It runs circles around Apple Music. Just a better recommendation and playlist experience.


    Yeah, sadly agreed. I tried Apple Music and really really wanted to like it, since I’m pretty invested in the Apple ecosystem and like most of Apple’s other products. But for me Spotify was just a lot better. 
    Japheywilliamlondon
     1Like 0Dislikes 1Informative
  • Reply 13 of 14
    FileMakerFellerfilemakerfeller Posts: 1,572member
    chasm said:
    red oak said:
    Spotify has never posted an annual profit in it’s 15 year history 

    In 2022, it lost $470 million 

    Just the facts 
    Meanwhile, Apple Music doesn’t break out its figures, but given the overall incredible growth and profitability of Apple’s Services division, I’m guessing its not that kind of a money-loser. Indeed, it’s incredibly unlikely to be losing any money at all at this point, despite paying more to artists than Spotify does.

    Possibly that’s because the team running it are not becoming billionaires off the back of a single product — but that’s just speculation on my part.
    [emphasis added]

    I'm not sure you can make that claim. All the music streaming services pay a bundle of money to the music publishers based on their subscriber base. The publishers then pass some of that money on to the artists. I find it unlikely that the price to each service is greatly different on a per-subscriber basis.

    To calculate the price paid per streaming event you take the average number of streams per subscriber. If subscribers to one service listen to fewer streams than subscribers to another service, the first service can claim to be paying more per-stream (hello, Apple) but on an aggregate basis it's not treating the artists any better.
     0Likes 0Dislikes 0Informatives
  • Reply 14 of 14
    holycowholycow Posts: 21member
    I love Spotify. However, with their prices increasing it's much more convenient to use the Apple Music. On top, they often have promotions like pay 1 get 3 and so on.
     0Likes 0Dislikes 0Informatives
Sign In or Register to comment.