March 4, 2021

Spotify is currently testing consumer appetite for increased subscription charges in the UK for its Premium Individual, Duo and Family plans.

Spotify’s price increase testing in the market was spotted by Alex Hern, the UK Technology Editor at the Guardian after a consumer survey was sent out to the music streaming company’s users in the country.

The survey notes increased prices for the Premium Individual, Duo and Family plans of £10.99, £14.99 and £19.99, respectively.

The prices are currently £9.99, £12.99 and £14.99, respectively.

The market-testing follows comments made by Spotify Chairman & CEO Daniel Ek on the company’s Q4 2020 analyst call in February in which he confirmed that price rises will become part of the company’s growth strategy going forward.

In Norway in July 2018, SPOT’s ‘tested’ 10% price increases for its standard Premium, student and Family Plans and they have remained 10% higher ever since.

In SPOT’s Q4 investor update, the company reported that it raised the price of the Family Plan in seven markets in October 2020,  including Australia, Belgium, Switzerland, Bolivia, Peru, Ecuador, and Colombia (alongside Duo in Colombia).

Early results of the increases are positive, says SPOT, having seen “no meaningful impacts to churn or customer intake in these markets.

“WE HAVE EXPERIMENTED WITH [PRICE RISES] FOR QUITE SOME TIME. WE STARTED TWO YEARS AGO SO IT’S NOT SOMETHING THAT WE’VE DONE IN A RUSH. BUT THIS IS THE TIME MAYBE WHERE YOU’RE SEEING IT’S ACTUALLY BECOMING A REAL PART OF THE STRATEGY.”

DANIEL EK, SPEAKING IN FEBRUARY

Ek told investors on the company’s Q4 2020 analyst that “there are three legs to the stool” of how Spotify can achieve growth and explained: “One, we can improve our product proposition. Two, we can launch in new markets and three, we can raise prices.”

Ek added: “We’re trying to optimize for growth and there’s three ways to grow. We’re now adding the third part of the stool here as well, but I don’t think you should read into that, that growth has peaked. It is more that we’re now flexing our muscles and adding that third part, too.”

He continued: “We have experimented with [price rises] for quite some time. We started two years ago so it’s not something that we’ve done in a rush. We did it in Norway two years ago, we’ve done it since in in Argentina, Australia and in many, many other markets throughout the time.

“But this is the time maybe where you’re seeing it’s actually becoming a real part of the strategy. Mostly in fact because of all the positive response that we have been seeing of the value that we’re providing already to consumers.”