Spotify's costs are increasing once more.
Spotify customers in the US are about to experience a price increase in the premium plan. Starting in July, the monthly fee for the ad-free tier will rise by a dollar, amounting to $11.99. This translates to a 20% increase from the previous amount over the past two years. The company explained that this move is to funding their investments in and development of product features.
Additionally, Spotify's Duo plan - which allows two individuals to share a premium membership - will go up by $2, bringing it to $16.99 per month. The family plan is also getting a hike of $3, making it $19.99 monthly. The streaming giant had already been raising subscription prices for international subscribers and made significant cuts to its podcast business while also conducting multiple rounds of layoffs.
The trend of increasing prices for streaming services is seeing all the major players getting on board. Paramount, Warner Bros. Discovery, NBCUniversal, Netflix have all taken the same route in their quest for profitability. Spotify's shares surged more than 2% in premarket trading, and the stock is up approximately 60% this year.
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Spotify's decision to increase prices is driven by their need to fund technological advancements and development in their business, such as improving product features. With the rising costs, it's evident that tech companies are employing strategic pricing strategies to enhance their offerings and boost their bottom lines.
