Spotify is preparing to adjust its plans and prices, Bloomberg reports. This will include price increases in several major markets, and there will also be a new plan that does not include audiobooks.
In the UK, Australia, Pakistan and two other unnamed markets, prices will rise by about $1 per month for individual plans and by about $2 per month for family and two-person plans, the report said. In the United States, its biggest market, prices will rise “later this year,” according to “people familiar with the matter.”
The higher pricing will allegedly help cover the cost of the audiobooks Spotify recently started offering. Spotify subscribers can listen to up to 15 hours of audiobooks per month. Of course, the company needs to pay audiobook publishers for all the listening time it provides “for free,” although so far it only makes money from audiobooks to listeners who exceed the aforementioned limits.
Spotify will also apparently launch a new plan that will only offer music and podcasts, not audiobooks. The plan is priced the same as its current individual premium plans. Users of this upcoming tier will have to pay for audiobooks. Basically, it goes like this: First, Spotify adds audiobooks to an existing premium plan, then raises the price but launches a new plan that does the same for silent books.
This all seems designed to entice people who buy the premium plan to buy audiobooks, allowing them to stay on the plan even if the price goes up, while those who don’t care about audiobooks need to skip ahead at any point The added hassle of switching plans. New launches.
But wait, there’s more. A “Premium” plan is also coming (seriously), giving you access to high-fidelity audio, “and other unspecified features.” This rumor has been circulating for several years, so maybe it will finally be canceled in 2024?
Spotify has recently been seeking, almost to a desperate degree, to diversify away from just music, as it pays out around 70% of its revenue to labels and artists. So its podcast push was born a few years ago, and more recently we’ve had audiobooks. But ironically, this alarmed music industry partners, who now fear they will receive less funding from Spotify. Their response to this concern has allegedly been pushing Spotify to raise prices.
Last year, Spotify raised prices for the first time since launching its premium service, a move that didn’t appear to have any adverse effects as its user base grew by 113 million, its best-ever growth. As of the end of 2023, Spotify had 602 million total users, of which 236 million were paying customers. The success of last year’s price increase gave the company’s management the confidence to raise prices again.