According to a recent report from Bloomberg, Spotify is preparing to make significant changes to its subscription plans and pricing structure. The proposed alterations include price hikes in certain key markets and the introduction of a new plan that excludes audiobooks.
The reported changes indicate an increase of approximately $1 per month for individual subscriptions and up to $2 per month for family and duo plans in markets such as the UK, Australia, Pakistan, and two undisclosed locations. In the United States, which is its primary market, insiders suggest a potential price adjustment “later this year.”
Allegedly, the reason for the price hike is to cover the costs associated with offering audiobooks, a service recently added by Spotify. Subscribers currently have access to up to 15 hours of audiobook content per month. However, the company is required to compensate audiobook publishers for all listening time, even though users perceive it as ‘free’. Consequently, Spotify has only generated revenue from audiobook listeners exceeding the aforementioned limit.
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In response, Spotify plans to introduce a new paid tier that will exclude audiobooks but retain music. This tier will have the same pricing as the current premium tier but will require users to pay extra for audiobooks. Essentially, Spotify introduced audiobooks to its premium plan, raised prices, and is now introducing a new tier without audiobooks.
Additionally, Spotify is set to unveil new subscription plans, including a “supremium” subscription that will offer lossless audio for music, referred to as high-fidelity audio, along with other undisclosed features. This tier has been rumored for several years and may finally be ready for launch.
Last year, Spotify implemented its first price hike since the inception of its premium tier. This adjustment did not have any adverse effects; instead, the platform experienced unprecedented growth, with its user base expanding by 113 million, marking the most substantial growth in its history.
By the end of 2023, Spotify boasted a total user count of 602 million, with 236 million paying subscribers. Encouraged by the success of the prior year’s price adjustment, the company’s leadership now feels confident in replicating this strategy once more.
