Spotify is planning to raise its monthly subscription prices in various countries around the world, particularly in Europe and Latin America, as per The Financial Times.
This move has triggered a 1.3% surge in Spotify’s shares, reflecting investors’ enthusiasm and confidence in the company’s pricing strategy and its potential to drive profits and subscriber growth globally.
Notably, the development comes as music streaming business rapid growth begins to slow, with global revenue growth in the sector halving in 2024.
The price hikes, which are expected to take effect by June, will reportedly increase individual subscription costs by around €1 across users’ boards.
This claim is supported by evidence that Spotify has already implemented new pricing in certain European countries, including the Netherlands and Luxembourg, though the company has refused to publicly confirm this to the Financial Times.
Despite seeking to boost profits amid a soaring stock , the music streaming giant has indicated that it does not intend to raise prices in the United States, its largest market, this June, given the recent July 2024 increase to $11.99 a month.
However, the Financial Times has revealed that Spotify is looking to create a ‘super-premium’ tier that would cost an extra $6, on top of the $11 a month subscription fee in the United States.
What this means for Africa
Spotify’s growth in Africa, especially in Nigeria, has been impressive, with the streaming giant boasting a large following in the region.
In 2024, Nigerian artists generated over ₦58 billion in royalties, marking a significant increase from previous years. The consumption of Nigerian music surged by 206% locally, and global streaming hours for Nigerian artists topped 1.1 million.
For African subscribers, particularly West Africa, where Spotify increased prices in April and November 2024, there are currently no indicated plans to hike plans for subscription prices.
This contrasts with other regions, as Spotify offers tiered pricing based on economic conditions, with lower fees in developing countries, including 39 African countries where the streaming service is now available.
In Nigeria, the monthly premium subscription costs around $1.08 (₦1300), whereas in South Africa, users pay significantly more at $3.33 (R59), highlighting the pricing disparity across regions
