Spotify will raise the price of an individual subscription in the United States by $1 — from $9.99 to $10.99 — according to a report Friday (July 21) at the Wall Street Journal.
The move has been widely expected by investors and analysts following numerous comments by Spotify executives about an eagerness to raise the price in the United States and a belief it could do so without turning away customers.
“I think we are ready to raise prices, I think we have the ability to do that, but it really comes down to those negotiations” with major music industry stakeholders, CEO Daniel Ek said during an earnings call on April 25. Those negotiations likely started last year. During an October earnings call, after Apple Music and Amazon Music raised the monthly price of individual subscription fees in the United States by $1, Ek said Spotify could raise prices in 2023 after it has conversations “with our label partners.”
Spotify has left the individual subscription price untouched at $9.99 per month since it launched in the United States in 2011. It did, however, raise the price of its family plan from $14.99 to $15.99 back in 2021. The company has dabbled with price increases in other markets, mainly focusing on student, Duo — an account for two subscribers — and family plans.
Assuming a higher price does not increase subscriber churn — and Spotify appears confident it will not — a small price increase stands to help boost top-line revenues and improve music gross margins. JPMorgan Chase analysts said in a March 8 report that a Spotify price increase for U.S. individual plans would create incremental annual revenue of about $200 million.
Spotify did not immediately respond to a request for comment on this story.