Music Streaming Just Got Pricier- Spotify’s U.S. Subscription Rates Going Up

In less than a year, Spotify wants to raise subscription prices again in the US. In July 2024, the Standard Plan for one person will cost $11.99, the Standard Plan for two people will cost $16.99, and for a family will cost $19.99. The Premium plan for individuals will go up by $1 in July 2023, and the Family plan will go up by $1.00 in 2021.

The company justifies the hikes for product innovation and investment. Following the US spike, other major markets including the UK and Australia have seen similar increases. However. Spotify keeps growing despite pricing changes. Even after raising rates last year, the company recruited a record number of customers, generating a significant running profit in early 2024.

The last time Spotify raised its monthly prices in the US was in July 2023, when the Premium plan for one person went from $1 to $10.99. It was the same change that happened in 2021 when the price of the Family plan went up by $1. Prices are going up again for Spotify, the best music streaming service in the world, after less than a year.
Going forward, Spotify Premium will cost $11.99, which is $1 more than it does now. Premium Duo will cost $16.99 instead of $16.99 after the price increase of $2. There will be a $3 increase in the price of the Family Plan from $19.99 to $19.99. The current prices will be applied to trial users for the first month. They will be charged more after the next payment term. As a way to keep improving its services and goods to give customers the best experience possible, Spotify says it needs to raise prices.

When Will Spotify Launch Its Long-Awaited Lossless Tier?

Over the past year or two, some music streaming services have added price hikes. But Spotify is unique because it has raised its subscription rates twice this period. Given the company’s lack of a lossless Hi-Fi streaming tier, first revealed in 2021, this is a noteworthy change.

Recent leaks including screenshots have spurred rumours that this much-needed Hi-Fi level would be here soon. Still, it would be wise to treat such rumors carefully and wait for Spotify to make an official statement before letting expectations grow. The company’s decision to raise costs twice without providing the promised lossless audio capability may rightfully cause users to question value proposition and openness.

Still, Spotify’s latest price hikes don’t seem to have slowed the growth of the business much. The company got 113 million more free users and 31 million paid customers in 2023, even though subscription prices went up the year before. This set a new record for user acquisition.

Together with a calculated three-round personnel reduction strategy, these actions have helped Spotify to recover profitability and record a stunning operational profit of €168 million in the first quarter of 2024, the biggest in company history.

This strong result emphasizes the platform’s ongoing popularity and the devotion of its user base, implying that the pricing changes have not greatly discouraged consumers from embracing Spotify’s music streaming offers. The company’s strategic expertise and the potency of its value proposition will be evident as the sector develops in its capacity to reconcile revenue optimization with a steady increase.

Again, a glimpse of Spotify Premium plans’ new pricing

  • Personal plan: $11.99, up from $10.99.
  • Couple plan: $16.99, up from $14.99.
  • Family plan: $19.99, instead of $16.99.
  • The student plan stays at $5.99.

Spotify’s Family Plan suffers relative to its primary rival, Apple Music, with the most recent price rise. With the same six-account limit for a lower cost, Apple Music’s Family plan still runs at $16.99.

Spotify Beats Netflix at Keeping Subscribers

Since users of music streaming services show significantly less propensity to switch providers than those consuming TV and movie content, Spotify obtains an advantage in the streaming landscape. Although less than 1.5% of Spotify’s subscribers moved to other platforms in April, research firm Antenna notes that the company’s average churn rate that is, the number of users who terminate their subscriptions shockingly low at roughly 2% all year long.

Video streaming users tend to be more transient, but music fans are more likely to be faithful, signing up for a service and sticking with it for a long time. This is a unique event in the music streaming industry, which gives Spotify an edge in keeping its users. This kind of good customer behavior puts the company in a good position, giving it some stability, steady income streams, and more chances to grow and come up with new ideas in the music streaming space.

To be honest, the thought of changing music streaming providers after devoting time and effort to creating the ideal playlists and teaching the recommendation algorithm to your particular preferences is not worth it. Most of us would far sooner avoid that trouble. Starting from nothing, either spending hours upon hours reconstructing those painstakingly chosen collections on a new platform or bidding farewell to them. And forget about those exact music recommendations you’ve become used to; you would have to retrain the entire system to learn your vibe all over once again. The idea of giving up all for a competitor service just doesn’t appeal as much as staying with the streamer that already seems like home, given so much work invested in customizing the experience to your listening tastes.

Some tools can help you move playlists from one streaming service to another, but let’s be honest there is still a huge pain for those of us who have been building the perfect mix for years. Getting those carefully curated collections to a new site will take hours and hours of administrative work. That’s not even counting all the extra features we’ve come to expect, like Spotify’s smooth Connect tool, an endless library of podcasts, and a growing library of audiobooks.

Last but not least, most music fans don’t care about how the business works as a whole. This is likely to stay the case as long as our favourite streaming service has the music we want and moving to a different service seems like more trouble than it’s worth. This includes reluctantly accepting price increases when they come up. It’s hard for artists and singers to accept, but this is how things are in our streaming-hungry world.