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Spotify shares rise after company reveals latest US price hikes as it seeks profitability
Spotify (TO SEE) shares rose 5.6% on Monday after the streaming giant announced another round of price increases for your US subscription plans.
Prices will rise between $1 and $3 starting in July, the company said Monday.
Family plans will see the biggest increase, with prices rising from $16.99 to $19.99 per month. Duo plans, which allow two users to share one account, will increase by $2 to $16.99. And Spotify Premium subscriptions will now cost $11.99 per month, an increase of $1 per month.
Spotify increased the cost of certain subscription plans last summer. The company previously suggested plans increase prices after last year’s several price increases “had minimal impacts on growth.”
“So that we can continue to invest and innovate in our product features and bring the best experience to users, we occasionally update our prices,” the company said in a blog post announcing the increases.
The news comes after Spotify made a profit in the first quarter and surpassed most of its key metrics. It also guided for higher revenue and operating results in the current quarter.
Over the past year, Spotify has committed to price increases, as well as multiple rounds of layoffs and other initiatives to improve profitability. The company said it would be more intentional about future investments after spending billions in its entry into the competitive podcast market.
During the company’s first-quarter earnings call in April, Spotify CEO Daniel Ek confirmed plans to offer multiple subscription levels to attract as many users as possible.
“We want to offer as much flexibility as possible in this next stage of Spotify because we are at the size where we want to attract an even larger consumer base,” said Ek. “This obviously means you’ll see things like, for example, the audiobook-only tier. … You should also expect to see a music-only layer.”
“The more value we create, the more ability we have to capture some of that value through price increases,” Ek said.
Spotify shares have risen more than 100% in the past year and are up 73% year to date.
A screen displays Spotify’s logo and business information on the floor of the New York Stock Exchange (NYSE) in New York City, February 6, 2024. (REUTERS/Brendan McDermid) (REUTERS/Reuters)
Alexandra Canal is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, linkedin, and email her at alexandra.canal@yahoofinance.com.
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