Spotify offers both a free, ad-supported service with limited features and a paid subscription service
Spotify, a digital music service raised the prices of its premium plans in the United States to boost its margins on Monday, June 3.
As per Reuters, the Swedish music-streaming service increased the price of its individual plan from $10.99 to $11.99 per month, its duo plan from $14.99 to $16.99, and its family plan from $16.99 to $19.99.
As per Reuters, the Swedish music-streaming service increased the price of its individual plan from $10.99 to $11.99 per month, its duo plan from $14.99 to $16.99, and its family plan from $16.99 to $19.99.
Meanwhile, Spotify has been trying to improve its margins by cutting marketing spending and laying off employees.
These changes follow a period of heavy investments and promotions aimed at growing its user base.
While, shares of Spotify rose about 4% in premarket trading following the price hike announcement.
In an email to subscribers, Spotify explained the price increase, saying it will allow the company to continue investing in and innovating its product offerings and features.
The email will be sent to U.S. subscribers over the next month.
Moreover, Spotify offers both a free, ad-supported service with limited features and a paid subscription service with full functionality.
Most of its revenue comes from premium subscribers. Analysts believe Spotify can grow further by creating tailored subscription plans for music, audiobooks, and podcasts.
In April, Spotify reported a quarterly gross profit exceeding 1 billion euros ($1.08 billion) for the first time, thanks to reduced marketing expenses.
The company also saw a 14% increase in premium subscribers, reaching 239 million, and it expects to have 631 million monthly active users in the second quarter.
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