A year and a half after the last price increase for its subscription in the U.S., Spotify is reportedly planning to raise prices for its service in the country once again by the beginning of 2026. According to the Financial Times, the company is facing pressure from major record labels to raise subscription prices. More interestingly, labels are also pressuring Apple Music to make its service more expensive as well.
The report says that music streaming service prices have lagged inflation and remain cheap, especially compared to video streaming services. For example, a Premium Spotify subscription is $11.99/month, while Netflix’s premium offer is $24.99/month. Still, even compared to the basic model without ads, the Standard subscription for Netflix ($17.99/month) is a lot more expensive than Spotify Premium.
Wall Street analysts believe the price increase could help the company show profitability, as JPMorgan analysts project that a $1-a-month price rise could improve Spotify’s annual revenue by $500 million.
Spotify could get more revenue for artists, but users might not be willing to pay extra
While Spotify has raised prices in multiple countries across the globe in the past year, most of these subscriptions are way cheaper than in Europe or in the U.S. Still, the price could creep high enough to prompt people canceling their subscription due to higher prices.
According to research by Claight Corporation, the top reasons why someone cancels a subscription is due to finding a better alternative or because the service got too expensive. Besides that, Spotify is in a harder position than Apple Music or Amazon Music. After all, Apple and Amazon can afford to hold prices or raise individual subscriptions but continue to promote its bundle services, such as Apple with Apple One.
At the same time, Spotify also has the largest market share of music streaming services available, according to Statista. While Spotify is expected to raise prices by the beginning of the next year, the company might see that market share shift if the price increase is too significant.
