Spotify is gearing up for changes in its subscription plans and pricing structure, as reported by Bloomberg. The anticipated adjustments include price increases in certain key markets and the introduction of a new plan that excludes audiobooks.
According to sources, the price hikes will range from about $1 to $2 per month for individual, family, and duo plans in markets such as the UK, Australia, Pakistan, and a couple of undisclosed locations. In the United States, the largest market for Spotify, a price adjustment is expected later in the year.
The higher prices are said to offset the costs associated with providing audiobooks, a recent addition to Spotify’s offerings. Subscribers currently enjoy up to 15 hours of audiobook listening per month, which incurs expenses for Spotify as it compensates publishers for the content.
The company’s move to introduce a new plan exclusively for music and podcasts, without audiobooks, suggests a shift in its strategy to diversify its offerings beyond just music, especially considering the substantial share of revenue it pays out to record labels and artists which currently stands at 70%.
Last year, Spotify raised its prices for the first time since the introduction of its premium tier, resulting in significant user growth. Its user base grew by 113 million – the best growth it’s ever seen. At the end of last year, Spotify had 602 million users, including 236 million paying subscribers. Maybe the success of last year’s price hike has given the company’s management the confidence to do it again.