Had Spotify included in its announcement today that it was raising the cost of its premium subscription tier to support the launch of Spotify Hi-Fi, this would not feel like such a big deal. The streaming giant has not raised the price of this tier for 12 years and that matters in a category where consumers have plenty of other options and people often vote with their wallets.
According to the company, the decision to increase prices are in response to an evolving “market landscape,” and to give Spotify enough revenue so it “can keep innovating,” the platform explained in a news release.
How does this impact you as a premium subscriber?
Spotify Premium subscribers will now see their subscription increase by $1 USD per month with a single plan costing $10.99, a duo plan costing $14.99, a family plan costing $16.99, and the student plan costing $5.99.
Spotify’s premium streaming option allows subscribers to listen to an unlimited amount of music ad-free, something is very appealing to consumers.
Nothing in this announcement should surprise Spotify Premium subscribers because the company made it clear back in April that increases were coming; especially after it laid off 6% of its employees and the competition including Apple Music and Amazon Music HD have already increased their pricing for similar tiers.
Spotify has never been profitable and the company believes that the increase in pricing will generate more than $1 billion in new revenue going forward.
The other issue involves artist compensation which is one of the biggest arguments against using Spotify; the platform sits near the bottom in that category and there will be an expectation that artists will earn more from this newly generated revenue.
The platform has suggested that artists will see a revenue increase of over 10% based on its own internal projections and long-term forecasts; but will that really amount to anything substantial when one looks at the current revenue model and pay-outs?
At the end of the day, consumers will pay more and that will not include Spotify Hi-Fi.
For more information: spotify.com/us/premium/
Related Reading:
- Spotify Announces ‘HiFi’ Lossless Streaming Tier (February 2021)
- Spotify HiFi and Some Wishful Thinking (September 2021)
