According to TechCrunch, Spotify is planning to raise subscription prices in the US during the first quarter of 2025. This would mark the streaming service’s first price increase in the US since July 2024. The company recently raised prices in several other countries including the UK, Switzerland, and Australia. A Spotify subscription currently costs $11.99 per month in the US, up from the original $9.99 price when it launched 14 years ago. JPMorgan analysts estimate that a $1-per-month increase could boost Spotify’s annual revenue by about $500 million. Additionally, major record labels have been pushing Spotify and other streaming platforms to raise prices, arguing they haven’t kept pace with inflation.
The inevitable price hike
Here’s the thing – this was always going to happen. Spotify has been playing the long game for years, absorbing losses while building its user base. Now they’re at the point where they need to actually make money. The timing is interesting though – right after founder Daniel Ek steps down as CEO. Coincidence? Probably not. It’s much easier for new leadership to implement unpopular changes than for the founder who built the brand.
The streaming price squeeze
Look, everyone’s raising prices. Netflix, Disney+, YouTube Premium – they’ve all been gradually increasing costs. Spotify has actually been relatively restrained compared to some competitors. But there’s a real question here: how much are people willing to pay for music streaming? We’re hitting that psychological barrier where $15/month starts to feel like real money. And let’s be honest – most people’s music listening habits haven’t changed dramatically in years. Are we reaching peak subscription fatigue?
The $500 million question
That JPMorgan estimate of $500 million in additional annual revenue sounds impressive. But here’s what they’re not saying: how many subscribers might they lose? Even a small percentage of cancellations could seriously dent those gains. And let’s not forget Spotify’s other revenue challenges – they’re still paying out massive chunks to record labels and artists. A price increase helps, but it’s not solving their fundamental business model issues. Basically, they’re stuck between needing to make more money and not wanting to scare away users.
New bosses, same problems
The leadership change from Daniel Ek to co-CEOs Gustav Söderström and Alex Norström is fascinating timing. New executives often want to make their mark quickly, and revenue growth is the most obvious metric. But raising prices is the low-hanging fruit – it doesn’t require innovation or new product development. The real test will be whether this new leadership can find other ways to grow revenue beyond just charging existing customers more. Because eventually, that well runs dry.
