Spotify offers new basic streaming plan in US amidst recent price hikes

Spotify has unveiled a new basic streaming plan for users in the United States, priced at $10.99 per month. This move follows the company’s recent increase in prices for its premium plans earlier in June.

Spotify music streaming

Spotify does not say that the recent price increase has had any negative impact on the digital music business in the United States. In the United States, Spotify has generated revenue of €1.394 billion during the first-quarter of 2024. Its total revenue was €3.6 billion. Spotify’s Premium revenue was €3.247 billion.

Spotify has 615 million subscribers. Spotify’s Premium Subscribers grew 14 percent to 239 million, led by growth in Family and Duo plans, in Q1. Spotify’s Premium ARPU grew 7 percent.

The new basic plan offers users the core streaming benefits of a premium plan, excluding the monthly audiobook listening time. In contrast, Spotify’s premium plans priced at $11.99 per month (following the price increase) provide offline, ad-free music listening and up to 15 hours of audiobook listening time per month.

Earlier this month, Spotify raised the prices for its premium subscription tiers as part of its strategy to improve profit margins. The individual premium plan price increased from $10.99 to $11.99 per month, the duo plan from $14.99 to $16.99, and the family plan from $16.99 to $19.99 per month.

Spotify premium price in June 2024

Spotify’s efforts to boost margins have included reducing marketing expenses and implementing layoffs, moving away from its previous strategy of heavy promotions and substantial investments aimed at user growth in the United States that remains Spotify’s largest revenue-generating market.

Additionally, Bloomberg News recently reported that Spotify is planning to launch a new premium plan later this year. This upcoming plan is expected to cost $5 more per month and will cater to the platform’s most dedicated users by offering higher-quality audio and advanced features for playlist creation and song library management.

With these changes, Spotify is continuing its push to balance user acquisition with profitability, adapting its offerings to meet diverse consumer needs while optimizing its financial performance.

Baburajan Kizhakedath

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