As Mixdown forecast earlier this year, Spotify has increased its premium prices in Australia.
The monthly cost will rise by a dollar or two depending on your plan. Existing Spotify Premium plan subscribers will be given a one-month grace period before the new price becomes effective, unless they cancel before the grace period ends.
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The news was announced overnight, with 52 countries copping the price hike. These included the U.S., the U.K., France, Italy, Singapore, New Zealand, Thailand, Greece, Chile, Hong Kong, Israel and Indonesia.
An official missive from the company stated: “With 200+ million Premium subscribers, we’re also proud to be the world’s most popular audio streaming subscription service, giving Premium users access to on-demand and ad-free music listening, offline music downloads, and quality music streaming.”
“The market landscape has continued to evolve since we launched. So that we can keep innovating, we are changing our Premium prices across a number of markets around the world. These updates will help us continue to deliver value to fans and artists on our platform.”
Spotify advised its Australian Premium subscribers they would be officially told by email. It added, “If you’re on a trial offer, you’ll have 1 month at the original price after your trial ends.
“After that, the new price for your plan will come into effect.”
Australians can still redeem their gift card “even if it was bought at a lower price.
“Please note that gift cards can only be redeemed on the Premium Individual plan.”
The Swedish streaming giant has been under pressure from the music industry to increase its royalty payments, and from its own investors to amp up its profitability.
Music industry analysts have done the numbers and worked out that the price hike for 44.4 million US Spotify subs – the U.S is its biggest market – alone would increase its yearly revenue in that country by between US$247 million (AUD $366.5 million) and $533 million ($790.8 million).
Existing subscribers will get a one-month grace period before the new pricing goes into effect. The news comes as competitors Apple Music, Amazon Music, and most recently YouTube Music announced higher prices.
Just how much extra profit will come from the Australian subs hike is not known. Spotify tends to roll Australian figures in its reports as part of “Asia Pacific” or “rest of the world”.
In 2020, independent researcher Roy Morgan estimated there were 12.7 million music streaming users and Spotify had the biggest market share with 8 million. In June, Spotify’s annual Loud & Clear report revealed that Australian artists generated US$250 million ($370.9 million).
But 80% of these were from Aussie acts based overseas like Kylie Minogue (who has of course now moved back to Melbourne), Nick Cave, AC/DC and Gang of Youths. Spotify chief Daniel Ek noted Australia’s “explosive growth” in a tweet.
Spotify is expected its Q2 earnings later tonight.
Analysts are expecting revenue to hit €3.21 billion (AUD $5.27 billion) compared to €2.50 billion (AUD $4.10 billion) in Q2 2022. Loss per share will be €-0.66 versus €-0.85 in Q2 2022.
Total monthly active users (MUAs) are forecast to hit 530 million, up from 433 million in Q2 2022. Profits would improve after Spotify slashed its workforce by 6% last October and axed six podcasts.
In the 2022 calendar year Spotify generated €11.72 billion ($19.2 billion) revenue, a €236 million ($387.4 million) loss with 433 million users once a month, 188 million subscribers, 100 million songs and five million podcasts.
Read the official announce here.