KEY TAKEAWAYS
- Spotify is reportedly boosting prices and making changes to its subscription plans.
- Bloomberg said the price hikes will go into effect in five countries this month, and in the U.S. later this year.
- Sources indicate the streaming audio service will also offer a new basic tier that won’t include audiobooks.
Spotify Technology (SPOT) shares rose to their highest level since Nov. 2021 on Wednesday following a report that the streaming audio provider will be boosting prices in several key markets and changing its subscription plans.
The company will raise prices by about $1 to $2 per month in five countries, including Australia and the U.K., by the end of the month, and they will go up in the U.S. later this year, Bloomberg reported.
The move will help cover the costs of audiobooks, which Spotify began offering late last year, the report said, citing people familiar with the matter.
In addition, the Swedish firm reportedly will introduce a new basic tier with music and podcasts, but not audiobooks, for the current premium plan price of $11 per month. Bloomberg had previously reported that Spotify was already working on a “supremium” plan that would give listeners several features, including high-fidelity audio.
Spotify has lost money every year since it went public in 2018 because some 70% of its revenue goes toward royalties it pays for the rights to music, according to the report.
Shares of Spotify were up 5.4% at $284.08 around noon ET, and are more than 50% higher this year.