Spotify is raising its prices yet again
They'll do it again. They should, but they shouldn't.
The Gist
Spotify is raising prices again in the US for its Premium, Duo, and Family plans. This is the second price increase in one year for US users. The new prices are $11.99 for Premium ($1 more), $16.99 for Duo ($2 more), and $19.99 ($3 more) for Family. Spotify says the increase is necessary to invest in new features and improve the user experience.
Why Spotify SHOULD raise prices
This price hike is something that absolutely needs to happen, but not necessarily only for the new features and improved user experience reasons Spotify gives.
Let’s be honest, we’ve all had it pretty damn good since 2008 or so when Spotify became a thing. Before Spotify, and before Napster, music was not free to consume unless you were listening to the radio. If you wanted to hear a certain song at any given moment, you would’ve had to have purchased that certain song, with real money, in advance. And in doing so, the musicians, artists, and bands were being compensated at a much higher rate. Streaming music, although great for consumers, has been mostly terrible for the mid to lower acts out there. It’s mostly the top artists that are still doing just fine.
Spotify needs to raise prices so that artists can be paid more for their work. But let’s be real, even if that was at least one of the reasons given for the price hikes, it, unfortunately, wouldn’t make too much of a difference anyway because the record labels are the ones hoarding any money from the artists. But that’s a subtopic for another day.
Why Spotify SHOULD NOT raise prices
But here’s why Spotify shouldn’t raise their prices — too high.
Most music streaming customers would be on board with prices rising if they knew the payouts to artists would be increased, but as noted above, that’s not what is happening.
We all know music is one of the greatest gifts we have on this earth. Music can really make you feel something. It can make you feel happy, sad, mad. It can lift you up. It can turn your day around for the better. It can take you back to a nostalgic time. It can open your eyes to the world around you. It undeniably has so much power.
Most of us, because of the value music brings, would be willing to pay even more for music streaming than what the incoming new rates will be. Back in the day, $12 was roughly the amount it cost to buy a band’s album on CD. Now, Spotify’s lowest-tiered premium plan, which is $12/mo, gives you access to pretty much all of the music in the world. Most of us already know this, and we realize that’s a pretty sweet deal. Believe me, Spotify and the other music streaming platforms, know this too. This won’t be the last time they raise prices.
I’d venture to guess that most consumers would be willing to pay upwards of $25/mo to be able to listen to any song anywhere at any time. So don’t be surprised when the price for an individual streaming plan reaches that mark—because it will. And even then, for the equivalent cost of buying two albums to listen to any song at any time, it will still be a steal.
However, consumers won’t pay more than that for an individual plan. As soon as the streaming services go higher than $25/mo, that’s when you’ll see the market turn. I predict paying subscriber numbers will start to fall. You may even see sales of physical and digital copies of albums and songs start to trend upward. Or you might just see Spotify’s current paying subscribers moving to the platform’s freemium version where users will be served ads before each song they choose to listen to. This would actually be a good thing for artists if Spotify decided to do what YouTube does and share the revenue for that ad with the artist the ad played before. But if paying subscribers don’t want to mess with Spotify’s Freemium version, you could see what Spotify does not want to happen: users jumping ship to YouTube. After all, every song on Spotify can be found on YouTube, music videos are there, and it’s completely free if you don’t mind watching an ad here and there — which there are ways around that.
Right now, streaming subscriptions are all the rage. Most everyone subscribes to something. You’ve got services like Netflix, Disney+, Hulu, Paramount+, Peacock, ESPN+, Starz, AppleTV, YouTube TV, Max, and more that were designed to replace cable. Most of us have more than one of these services. Over time, each of these services has increased prices slowly along the way. Now most of us with multiple streaming services are paying way more than we were with our old cable subscription. And it’s not just entertainment streaming subscriptions; there are a lot of other types of subscriptions out there that we subscribe to. All of those subscriptions add up, and it’s becoming too expensive. Something has to give at some point. People will have to start picking and choosing what stays and what goes. Spotify just needs to make sure it’s one people want to hold onto.