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Spotify Premium subscriptions embrace as much as 15 hours of audiobook listening. But beginning in April, the corporate will cost an additional $1 to $2 per 30 days for the function, Bloomberg reported right now, citing nameless “people familiar with the matter.” The reported price hike could be the second that Spotify prospects have confronted in 9 months.
Currently, Spotify costs 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 Family 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 adjustments will reportedly begin in Australia, Pakistan, the United Kingdom, and two different markets by the tip of this month. Subscribers in the US will reportedly see costs rise “later this year.”
Spotify will usher the adjustments by providing a ‘new’ fundamental tier that lets customers entry every little thing on Spotify besides audiobooks for $10.99/month, per Bloomberg. That would imply that individuals who solely use Spotify for listening to music and/or podcasts would keep away from paying the next month-to-month fee. Basic plan members will nonetheless have the ability to purchase audiobooks by 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 join what could be marketed as a brand new plan. It additionally did not point out if the essential plan would have extra drawbacks.
The upcoming price improve could be Spotify’s second because it launched Premium pricing in 2011. In July, Spotify bumped the beginning Premium price from $9.99/month to $10.99/month. Spotify’s announcement adopted price hikes from rivals like Amazon Music and Tidal.
Spotify tries to be worthwhile
Spotify could deem these adjustments essential to buoy audiobook income. The firm is closely invested in the sector and spent $123 million to accumulate Findaway in July 2022. Spotify mentioned it was the second largest audiobook model after Audible, citing Bookstat knowledge printed in The New York Times. But because it stands, Spotify solely generates income from audiobooks if customers transcend the 15 hours per 30 days restrict included in their Premium plan, per Bloomberg.
Spotify, which launched in 2008, hasn’t had a worthwhile yr (though it has reported worthwhile quarters at instances). Audiobooks characterize a possibility 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 p.c of its 2023 income ($13.2 billion). Bloomberg mentioned Spotify’s music business companions “have been pushing Spotify and its competitors to raise prices” 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 p.c of workers.
Audiobooks might assist Spotify’s wallets. But charging additional for a service it has been pushing since October dangers shedding a number of the listeners it is earned. At the identical time, if Spotify ensures that long-time customers who merely need Spotify for its unique bread-and-butter aren’t impacted, it might assist decrease disruption.
As with any price hike, although, Spotify’s altering pricing construction will drive customers to reassess whether or not they wish to hold paying for Spotify or think about alternate options. Those who’ve been ready for Spotify to supply high-fidelity audio since 2021, for instance, could resolve the app doesn’t match their wants.
A Spotify spokesperson declined to touch upon Bloomberg’s report back to Ars Technica.