Would you be willing to pay more for Spotify even if you didn’t get anything new from the subscription streaming service? That’s the question the Swedish company is asking itself, according to Bloomberg. It plans to answer it by testing more expensive price plans in its home turf of Scandinavia, starting with its family tier. The test, which is unconfirmed, will raise the price of that plan by 13%, unnamed sources told the news service.
Spotify has a long history of testing everything from new features within its app, to new devices that act as companions to the streaming music service. Some of these tests stick around, while others just as quickly evaporate. It’s unknown if Spotify is contemplating raising its rates outside of the European market where it is currently the dominant music service by a wide margin. In other markets, like the U.S., it trails Apple Music which could mean that any price adjustments will be based on competitive realities. YouTube Music, Pandora, and Amazon Music are all vying for the top spot in the U.S., making it an especially tricky place to consider pricing changes.
Still, as Bloomberg points out, the company may have little choice. Under fire from music labels and artists over falling revenues — despite having an enormous lead on subscriber count globally — it’s unknown whether companies like Apple or Google run their music businesses on a break-even basis, or even at a loss, something that Spotify has done for years, but won’t be able to keep doing as a long-term strategy. At the same time, Spotify is filed a complaint against Apple over the fees that Apple charges companies from in-app purchases, something that puts even more pressure on Spotify’s bottom line.
Concerns over revenue aside, Spotify has been heavily engaged in developing its platform, testing features like preferred devices for easier transitions between at-home and outside listening, personalized playlists, voice-enabled ads, artist blocking, social listening, and better podcast discovery. It’s even taking a shot at radio’s traditional stronghold: The morning drive.
These features may not drive increased sign-ups for the service, but if users find them valuable it makes ditching Spotify for a competitor less likely, even if the company decides to follow through on its price increases. Are you an AT&T subscriber? You might be able to get Spotify Premium for free.
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