Spotify (SPOT) shares surged up to 4% in early trading on Monday after the streaming giant revealed another round of price increases for its US subscription plans.
Starting in July, prices will rise between $1 and $3, the company announced. Family plans will see the biggest hike, increasing from $16.99 to $19.99 per month. Duo plans, which allow two users to share an account, will rise by $2 to $16.99, while Spotify Premium subscriptions will now cost $11.99 a month, up by $1.
Spotify previously raised the cost of certain subscription plans last summer and had hinted at further price hikes, noting that the initial increases had “minimal impacts on growth.”
The company stated in a blog post, “So that we can continue to invest in and innovate on our product features and bring users the best experience, we occasionally update our prices.”
This announcement follows Spotify’s profitable first quarter, where it exceeded most key metrics and projected higher revenue and operating income for the current quarter.
Over the past year, Spotify has committed to price hikes along with multiple rounds of layoffs and other initiatives aimed at improving profitability. The company has indicated a more intentional approach to future investments after spending billions on expanding into the crowded podcast market.
During the first-quarter earnings call in April, Spotify CEO Daniel Ek confirmed plans to offer various subscription tiers to attract a broader user base. “We want to offer as much flexibility as possible in this next stage of Spotify because we are at the size where we want to appeal to an even larger base of consumers,” Ek said. “That obviously means you’ll see things like, for instance, the audiobook-only tier. … You should also expect to see a music-only tier as well.”
Ek added, “The more value we create, the more ability we will have to then capture some of that value by price increases.”
Spotify stock has more than doubled over the past year and is up about 64% year to date.
