Spotify hikes Premium prices as streaming firms push for profitability

Spotify is lifting the price of its Premium subscription service by 8%, underlining how major streaming platforms are leaning more on subscription revenue to support sustained profitability.

The Swedish audio group said on Thursday that US prices will rise to $13 a month, marking its first increase for American users since 2024.

Spotify is also raising prices in Estonia and Latvia after adjusting fees in several other countries last year.

The changes arrive as the industry tests how far loyal audiences will follow, even as monthly bills rise across digital entertainment.

The adjustment reflects shifting economics across digital media as platforms prioritise margins over rapid expansion.

Why Spotify is raising its Premium subscription price

Spotify said the increase will help it continue improving its service and support artists, as it works towards maintaining profitability.

The decision highlights how subscription-driven businesses are trying to keep revenue growth steady while costs remain elevated.

The move also reflects growing pressure on Spotify to ensure pricing keeps pace with inflation, while not losing users in its biggest market.

The US remains Spotify’s largest market, making price changes there especially significant.

The company had already increased fees in some countries last year, but had held off on raising prices for American subscribers since 2024.

This latest change raises the standard Premium plan to $13 a month from $12 a month, as Spotify tries to strengthen the economics of its subscription business without disrupting user growth.

Competition with Netflix and other subscription platforms

Spotify’s price hike also follows broader shifts among consumer subscription platforms, with services such as Netflix Inc increasing prices in response to higher operating costs and changing customer demand.

As more streaming companies focus on extracting more value from their most engaged users, Spotify’s decision suggests it believes its core listeners will continue paying even after an increase.

The company is seeking to balance subscriber retention with higher revenue per user in key regions.

Loyal listeners may limit cancellations despite price hikes

Spotify has more than 280 million paid subscribers and has built a user base known for sticking with the service.

Many listeners have spent years building their music libraries, playlists, and saved content, creating a switching cost that makes it harder to cancel.

Reports have also indicated Spotify listeners are among the least likely to cancel compared with users of major US video or audio streaming services, which could give the company more room to adjust pricing while protecting subscriber numbers.

Spotify shares rose 3% in premarket trading on Thursday following the announcement, signalling that investors welcomed the plan to strengthen subscription revenue and support its profitability goals.

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