Spotify has announced yet another hike in subscription prices for its users in the United States, creating a stir online. Surprisingly, these increased rates came just a day after Spotify's CEO Daniel Ek seemingly devalued the music that makes his platform so popular. Ek made a controversial statement on X (formerly Twitter), suggesting that the songs millions of subscribers stream could be equated to mere “content” and had little value.
Ek's comments immediately drew harsh criticisms from both users and musicians alike. Singer KT Tunstall responded “I for one don't make ‘content'. I make music.” Despite these sentiments, research findings suggest that music streaming service users are unlikely to switch platforms, unlike other entertainment streaming service users.
Spotify hikes subscription prices yet again
In light of this, the US audience of Spotify, already miffed by the insensitive comments from Ek, might start contemplating a switch from the platform. As the furor over Ek's statement is still fresh, Spotify announced another price increase within a year. Single user Premium Plans will now cost $11.99, a dollar more, the Duo Plan has been bumped by $2 at $16.99 monthly, and Family Plans have seen the sharpest increase priced at $3 to $19.99 monthly. Students, however, remain unaffected by the price hike, with the discounted plan retaining its $5.99 pricing.
Existing subscribers will be notified of the price hike within 30 days, post which the increased rates will apply. Justifying the price increment, the company states “the price hikes are to ensure that it can still “invest in and innovate on our product features” and deliver the best experience.” However, it's puzzling considering Ek's comments about “the cost of creating content being close to zero,” making subscribers wonder why Spotify is asking for more money.
Spotify's resilience despite price hikes
Research analysis suggests that music streaming service subscribers are more likely to stay loyal to their current platform as opposed to TV and movie streaming service users. A study by Antenna indicated that less than 1.5% of Spotify users switched providers in April, and on average, only about 2% of Spotify's user base changes platforms annually. This is because music listeners find it more cumbersome to switch due to established playlists and tailored music recommendation algorithms. Despite elevated prices and the backlash against Ek's comments, Spotify users are likely to stay, suggesting that Ek's comments may not impact Spotify's user base significantly.
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