Spotify is planning to increase the prices of its monthly subscription plans, CEO Daniel Ek said yesterday. But only “when the timing’s right”, which is a bit vague.
There have been some price increases already for some Spotify subscription plans in some markets, which Ek was keen to remind people about. But what everyone is really interested in is when Spotify will follow competitors like Apple in moving its headline 9.99 price point to 10.99.
During an investor call that was running through the streaming firm’s first quarter financials, Ek said: “We did raise prices in 46 different locations and markets last year, and even in those markets we were still out performing. I feel really good about our ability to raise prices over time – that we have that ability – and we have lots of data now that backs that up”.
He added that the company may have been “marginally helped” by keeping prices low to date, “but it isn’t a primary part of our strategy and it’s not something that we’re thinking about. Instead, we’re working with our label partners … to figure out what’s the best opportunity to [raise the price]. And that’s a more complex trade. When the timing’s right we will raise it”.
I think most of those labels would have quite liked Spotify to increase its prices at least two years ago, but apparently it’s all down to them now.
“I think we are ready to raise prices”, said Ek. “I think we have the ability to do that, but it really comes down to those negotiations [with the labels]”.
Elsewhere on the call, the company’s latest revenues and user numbers were also detailed. And it’s all up, up, up! Monthly average users were up 22% year-on-year to 515 million. 210 million of those are paying for the service – a 15% increase on the previous year, thanks largely to increased uptake of Spotify’s discounted family and duo plans.
Ad-funded users were also up 26% year-on-year to 317 million, although “macro-related variability” in the company’s advertising business meant that revenue growth on that side was not as high as expected.
Still, Spotify reported total revenues of €3 billion for the first three months of the year – up 14% on the same period in 2022. That still resulted in an operating loss of €38 million though.