Spotify raises prices in the US, its largest market, in July. The New York-listed Spotify stock rises 5% in pre-market trading on Wall Street following the announcement.
With a price increase of 9% in July, the premium subscription will cost $11.99 (approximately 126 Swedish kronor per month), according to Spotify in a press release.
According to Bloomberg Intelligence – part of the news agency Bloomberg – the price increase could contribute to a $400 million (approximately 4.2 billion Swedish kronor) increase in Spotify's revenues in the second half of 2024. This makes the market's average forecast of an annual revenue of $17 billion seem low.
Analysts at Key Banc Capital Markets estimate that the price increase will lift the company's revenues by around 3-4% over the next 12 months and that it is too small to have a significant negative impact on Spotify's positive customer flow. Spotify's customers are known to be significantly more loyal than those of other streaming companies.
Spotify justifies the price increase by wanting to invest in and develop the product offering to be able to offer the best experience for customers.
The price increase will be the second in the US within a year and follows Apple and Amazon, which have also raised prices for similar services.
