Spotify subscriptions will get a little more expensive next month as the audio streaming service plans to raise its membership prices for the second time in about two years.
Starting in July, Spotify’s Individual plan will increase from $1 to $11.99 per month and its Duo plan will increase by $2 to $16.99 per month. The family plan will increase by $3 to $19.99 while the student plan will remain at $5.99 per month.
The increase will help it “continue to invest and innovate in our product features and provide users with the best experience,” Spotify said in a statement Monday.
The increase comes after Spotify in April announced a record profit of $183 million for the first quarter of 2024, after increasing monthly subscribers to 615 million, up from 515 million the previous year. In a conference call with analysts, CEO Daniel Ek said the company was focused less on gaining subscribers and more on revenue growth.
“Next year we may again focus on growing users at the top of the funnel, but in the short term, monetization remains our top priority,” Ek said.
The Stockholm, Sweden-based company was founded in 2006 but has struggled to generate profits since its IPO in 2018. The company reported an operating loss of $81.6 million in the fourth quarter of 2023 The company increased its prices by approximately. this time a year ago in a move that, at the time, would help “bring value to fans and artists.”
During the same conference call, Ben Kung, Spotify’s interim CFO, said that “our data shows that historical price increases have had a minimal impact on growth.”
Spotify reached profitability after the company laid off hundreds of employees following excessive hiring during the pandemic. The company took advantage of lower borrowing rates between 2020 and 2021 and financed its expansion, investing heavily in employees, content and marketing, Spotify said in a December blog post.
But that expansion slowed during three rounds of job cuts, starting in January 2023, when the company eliminated 6% of jobs, bringing its workforce to 9,200 employees. Just four months later, it cut another 2%, or 200 employees, primarily in its podcasting division. Spotify drops another 1,500 in December 2023.
Spotify also increased its prices this year in Australia, Pakistan and the United Kingdom. Its stock price rose 4.5% in midday trading to $310 per share.
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