By Reuters | Updated: June 03, 2024
June 3 (Reuters) – Spotify raised prices for its premium plans in the United States on Monday, the latest step by the Swedish music-streaming service in its push to increase margins.
On a monthly basis, Spotify has raised prices of its individual plan to $11.99 from $10.99, duo plan to $16.99 from $14.99 and its family plan to $19.99 from $16.99 in the U.S.
Spotify has been trying to boost its margins in recent months by lowering marketing spending and through layoffs, after relying on promotions and hefty investments to drive user growth.
Shares of the company, which competes with services from Apple (AAPL.O) and Amazon.com (AMZN.O) rose about 4% in premarket trading.
“We’re increasing the price of Premium Individual so that we can continue to invest in and innovate on our product offerings and features,” Spotify said in an email, which it plans to send to its subscribers in the U.S. over the next month.
The company offers an advertising-supported free service with limited features and a subscription-based paid service that gives access to all its functionality, with premium subscribers accounting for most of its revenue.
Analysts expect the streaming giant could drive further growth by offering tailored subscription plans based on consumer preferences in verticals such as music, audiobooks and podcasts.
The company’s quarterly gross profit topped 1 billion euros ($1.08 billion) for the first time in April after it reined in marketing spending.
Its premium subscribers rose by 14% to 239 million and it forecast monthly active users at 631 million for the second quarter.
($1 = 0.9233 euros)
@ Thomson Reuters 2024
