Spotify Technology SA is planning to raise prices by about $1 to $2 a month in five markets which include the UK, Australia and Pakistan by the end of this month, Bloomberg reported citing people in the know. Following the announcement, shares of the Swedish music streaming service rose more than 5%.
Spotify is likely to raise prices in the United States later this year, the report said as the company will introduce a new basic tier that will offer music and podcasts but not audiobooks. This will be part of the current individual premium plan and will be the first of several new pricing options from Spotify, the report added.
Under the new pricing, individual plans will go up by about $1 a month, while family plans and so-called duo plans for couples will rise by $2. Currently, on a monthly basis, Spotify offers premium plans which are priced at $10.99 for an individual, $14.99 for duo and $16.99 for family in the US.
The price hike could help push Spotify’s profitability as it is expecting strong growth in subscribers. The company said earlier that it might see a near 14% jump in premium subscribers to 239 million in the current quarter. With the aim to increase subscribers, the company has already introduced podcasts and audiobooks. Spotify also has content licensing deals with Universal Music Group, Sony Music Entertainment and Warner Music Group.
