On Tuesday, Spotify Technologies SPOT defended its $11.99 Premium plan while signaling that future price hikes could be part of its long-term strategy.
What Happened: During Spotify’s first-quarter 2025 earnings call, executives were asked why the platform hasn't raised its price more in the past 19 years, and how much room is there to raise it going forward.
In response, CEO Daniel Ek said that in the beginning, Spotify focused only on growing its user base, not on making money. Later, they started thinking about how to convert free users into paying users. That's when features like Family Plan and Student Plan were added.
“I still believe there will be more segmentation,” Ek said, adding, “But yeah, I think the opportunity is big.”
Spotify's chief business officer, Alex Norstrom, then added that even after the price increases, Spotify is still seen as one of the best values in entertainment.
“When we look at churn, this continues to be quite modest even as we raise prices in different markets. And as we’ve said many times before, prices are now, price increases are now part of our toolbox,” he stated.
How Spotify Compares With Its Competitors: Spotify faces stiff competition from rivals like Apple Inc. AAPL Music and YouTube Music, a product of Alphabet Inc.'s GOOG GOOGL Google, all offering similar subscription tiers at comparable price points.
Spotify’s plans include $5.99 per month for students, $11.99 for individual users, $16.99 for two-person family plans, and $19.99 for families of up to six.
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Apple Music's pricing starts at $5.99 per month for students, $10.99 for individual users, and $16.99 for a family plan that supports up to six members.
Apple Music is also part of the Apple One subscription bundle — the Individual plan is priced at $19.95 per month, the Family plan at $25.95 per month, and the Premier plan at $37.95 per month
YouTube Music offers two tiers of pricing—one without YouTube Premium and one bundled with it.
The standalone YouTube Music subscription costs $5.49 per month for students, $10.99 for individual users, and $16.99 for a family plan covering up to five members.
For users seeking an ad-free video experience as well, the bundled option with YouTube Premium is priced at $7.99 for students, $13.99 for individuals, and $22.99 for families with up to five accounts.
Why It's Important: Spotify posted quarterly earnings of $1.13 per share, falling short of the analyst consensus estimate of $2.33. The company added 3 million monthly active users (MAUs) from the previous quarter, bringing the total to 678 million, meeting its projected guidance.
Earlier this month, a steep drop in consumer confidence raised red flags across Main Street, as renewed inflation worries and heightened recession risks sparked fears.
However, Netflix Inc. NFLX co-CEO Greg Peters has downplayed those concerns, noting that entertainment has traditionally remained resilient even during periods of economic downturn.
Price Action: Spotify shares have climbed 26.03% so far in 2025 and are up an impressive 101.56% over the past 12 months. However, the stock slipped 3.48% on Tuesday, according to Benzinga Pro.
In the Benzinga Edge Stock Rankings, Spotify has a growth score of 9.94% and an outstanding momentum score of 97.52%. Click here to see how it stacks up against rivals like Apple, YouTube, and others.
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