Increase in Spotify Subscription Costs Attributed to Audiobook Expansion, According to New Report
Hey there! Here's a fresh spin on that Spotify price hike news:
Spotify's signing off on an increase in subscription prices this year, and the reason might not sit well with some users. After all, who wants to pay more for something they didn't ask for in the first place?
According to a report by Bloomberg, the streaming giant plans to raise prices by $1 to $2 a month in the UK, Australia, and Pakistan from the end of April. U.S. subscribers can expect the same later in the year. The bump is intended to cover the cost of a new service offering—audiobooks.
Spotify experimented with audiobooks last year on a trial basis, and while it generates some revenue from users who exceed a 15-hour limit on these books, that's not enough to pay for the full service. So, the price hike will help make up the difference.
For those who are only interested in music, don't worry—Spotify is reportedly working on a basic tier that will keep the subscription price at $11 a month. Access to audiobooks will be an add-on.
Spotify remained tight-lipped about the price increases, but it wouldn't be the first time they've raised their prices. Last year, they upped the subscription fee by a dollar, raking in over $1 billion in added revenue. Most of that money went toward licensing fees for the readily available music on the platform.
Other streaming services aren't far behind. Apple, Amazon, and YouTube Music Premium also raised their monthly subscription rates, as did practically every other streaming service, including Netflix, Disney+, and Max. Streaming services now claim a whopping $61 from the average U.S. household, a 27% increase from last year.
Now, Spotify isn't just raising prices to cover costs—it's part of a strategic business move. They're aiming to boost profitability, grow their premium user base, and stay competitive in the streaming market. In fact, there's talk of a new tier called "Spotify Music Pro" offering higher-quality audio and access to concert tickets for an extra cost.
So, while the audiobooks might contribute to the price increase, they're not the sole reason. Spotify's overall business strategy and revenue growth play a significant role too.
Sources:
- Spotify's Profitability and Revenue Growth
- Spotify's Subscriber Growth Despite Price Increases
- Discussions About Spotify Music Pro
- Spotify's Audiobooks Currently Generate Limited Revenue
- Spotify's move to raise prices by $1 to $2 a month in countries like the UK, Australia, and Pakistan, starting from the end of April, is part of a strategic business strategy to boost profitability and grow their premium user base.
- Apple, Amazon, and YouTube Music Premium, like Spotify, have also increased their monthly subscription rates, as have other streaming services, including Netflix, Disney+, and Max, signifying a trend in the industry.
- To cater to users interested only in music, Spotify is reportedly working on a basic tier that will keep the subscription price at $11 a month, with access to audiobooks available as an add-on.
- In Pakistan, the cost of technological advancements such as the new audiobook service offered by Spotify might raise concerns for some users, as they find themselves having to pay more for a feature they may not have initially requested.
