Tuesday, August 20, 2019

Spotify Test Drive Higher Prices In Scandinavia | hypebot

3Having accrued an impressive number of subscribers, Spotify is planning to hike up prices on its home turf, increasing the cost of its family plan in Scandinavia by 14%. Whether this test will amount to anything, or be rolled out anywhere remains to be seen, however.


Guest post by Bobby Owsinski of Music 3.0

Now that it has a healthy number of subscribers, Spotify would like to raise its prices and the first place it’s trying is in its own back yard. The company is planning on increasing the price of its family plan by 14% in Scandinavia, according to Bloomberg.

3Since music streaming has the most penetration in Scandinavia (Norway, Finland, Sweden) and has been there the longest, this seems like a logical choice for a test market. Spotify would love to raise its prices worldwide to keep Wall Street happy, and that’s not exactly something that either artists or record labels would fight. Higher prices mean more revenue for everyone, but that also means that consumers might be unhappy enough to have a look at another streaming network instead.

While it might not be feasible to raise the $9.99 per month individual price, the family plan is a place where an increase might be more transparent. Any increase short of doubling the price still makes the plan look like a bargain.

Both Spotify and the record labels have had recent issues with the family plans of most services, since many times the plan is spread around to multiple users not in a family who could easily be paying the individual subscription. The argument has been that it’s difficult to police exactly who’s in a family anymore, since not all families live together and some want extended family members in their plans. An increase in prices might make up for some of this shortfall.

Another aspect is that other streaming services like Netflix has been able to increase its prices 4 times in the last 5 years while Spotify has not raised them once.

Of course, one of the problems is that all streaming services have pretty much the same catalog of songs, so if one service becomes too expensive it’s pretty easy for a customer to switch to another and not lose too much in the process.

That said, this price increase in Scandinavia is said to be only a test and doesn’t mean that they’ll be rolled out anywhere else.

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