After incurring huge losses, Spotify increases subscription fees

economictimes.indiatimes.com:

Spotify has decided to hike its subscription rates. The company will increase its monthly subscription rate for individual plans by GBP 1 to GBP 10.99. For a premium duo plan, one has to pay GBP 14.99, and GBP 17.99 for a family plan.

Spotify will not increase the subscription for students’ plan, it will remain GBP 5.99 per month. These are the fees for subscribers in the U.K. The subscription fees for the U.S., Canada, and 49 other territories too will go up.

The audio streaming platform has said in the latest financial results that it has succeeded in adding 36 million monthly active users between April and June. It has 551 million active monthly users. Out of these, 220 million subscribers pay.

But it suffered despite increased sales. Spotify incurred a hefty loss of EUR 241 million in the first quarter of the current financial year. It is a staggering amount compared to the loss of EUR 90 million during the same period in the previous financial year.

Justifying the decision of increasing the subscription fees, Spotify said that it is doing so to continue giving services to its valued customers. It also said that it will give a grace period of one month before the new fees come into effect. The company also slashed its workforce by 6 percent in January this year.

The audio streaming platform has also slashed big and celebrities’ signing, including podcasts of the Duchess of Sussex. The company signed a GBP 20 million deal with Prince Harry and his wife Meghan Merkel in 2020. A deal with the company of ex-U.S.

President Barack Obama and his wife Michelle also ended last year. Spotify is not the first company to raise its fees. Apple Music, Peacock, Netflix, Max, and Paramount+ increased their subscription fees before