Spotify Premium subscriptions embrace as much as 15 hours of audiobook listening. However beginning in April, the corporate will cost an additional $1 to $2 per 30 days for the characteristic, Bloomberg reported at present, citing nameless “individuals aware of the matter.” The reported worth hike could be the second that Spotify prospects have confronted in 9 months.
Presently, Spotify fees nothing for its free plan with advertisements, $5.99/month for college students, $10.99/month for its Premium plan, $14.99/month for its Duo Premium plan for 2 customers, and $16.99/month for its Household Premium plan with as much as six customers.
Bloomberg reported that particular person plan costs will go up by roughly $1 per 30 days and multi-member plans will improve by $2 per 30 days.
The modifications will reportedly begin in Australia, Pakistan, the UK, and two different markets by the top of this month. Subscribers within the US will reportedly see costs rise “later this yr.”
Spotify will usher the modifications by providing a ‘new’ fundamental tier that lets customers entry every little thing on Spotify besides audiobooks for $10.99/month, per Bloomberg. That may imply that individuals who solely use Spotify for listening to music and/or podcasts would keep away from paying a better month-to-month fee. Primary plan members will nonetheless be capable to purchase audiobooks by means of Spotify, Bloomberg mentioned.
Bloomberg didn’t specify whether or not Spotify would default present subscribers to this plan in order that their month-to-month prices wouldn’t change or if customers must take steps to enroll in what could be marketed as a brand new plan. It additionally did not point out if the fundamental plan would have extra drawbacks.
The upcoming worth improve could be Spotify’s second because it launched Premium pricing in 2011. In July, Spotify bumped the beginning Premium worth from $9.99/month to $10.99/month. Spotify’s announcement adopted worth hikes from rivals like Amazon Music and Tidal.
Spotify tries to be worthwhile
Spotify might deem these modifications essential to buoy audiobook income. The corporate is closely invested within the sector and spent $123 million to accumulate Findaway in July 2022. Spotify mentioned it was the second greatest audiobook model after Audible, citing Bookstat knowledge revealed in The New York Instances. However because it stands, Spotify solely generates income from audiobooks if customers transcend the 15 hours per 30 days restrict included of their Premium plan, per Bloomberg.
Spotify, which launched in 2008, hasn’t had a worthwhile yr (though it has reported worthwhile quarters at occasions). Audiobooks characterize a chance for the corporate to diversify income streams past its conventional routes, which embrace paying hefty royalty charges. Spotify says it paid $9 billion in music-related royalties final yr, or about 69.7 % of its 2023 income ($13.2 billion). Bloomberg mentioned Spotify’s music business companions “have been pushing Spotify and its rivals to lift costs” amid considerations about royalty costs.
Spotify has additionally invested over $1 billion in a podcast enterprise that’s at present unprofitable (though Bloomberg famous that Spotify expects this to alter in 2024). In December, Spotify introduced it was shedding 17 % of staff.
Audiobooks may assist Spotify’s wallets. However charging further for a service it has been pushing since October dangers shedding among the listeners it is earned. On the identical time, if Spotify ensures that long-time customers who merely need Spotify for its authentic bread-and-butter aren’t impacted, it may assist reduce disruption.
As with all worth hike, although, Spotify’s altering pricing construction will pressure customers to reassess whether or not they wish to preserve paying for Spotify or contemplate alternate options. Those that’ve been ready for Spotify to supply high-fidelity audio since 2021, for instance, might determine the app doesn’t match their wants.
A Spotify spokesperson declined to touch upon Bloomberg’s report back to Ars Technica.