At this point, a Spotify price hike in the US isn’t an ‘if,’ it’s a ‘when’. But what if hiking the price on price-sensitive Americans is a costly mistake?
Spotify’s been blasting price increases across dozens of countries this year. Now, it’s America’s turn.
For months, rumblings of a stateside increase have shifted into a steady drumbeat — despite Spotify’s apparent hesitation to pull the trigger. Just hours ago, the Financial Times was the latest to report on an upcoming increase, which, according to the financial pub, is coming in Q1 of next year (i.e., a few months away).
The catalyst for the upcoming hike is — you guessed it — major labels Universal, Sony, and WMG, though Wall Street is also pressuring the DSP to jack their rates. Undoubtedly, Spotify wants a juicier gravy train, too.
Indeed, everyone in the music business seems ready for a Spotify price hike. But is the American consumer?
Despite the price-sensitive realities on American soil, Spotify seems to be adopting a cocky tone. “We also saw steady retention rates following the rollout of our recent price increases across more than 150 markets,” Alex Norström, Spotify’s Chief Business Officer & Co-President, relayed in the company’s recent quarterly results call. “These results show the power of the product and the loyalty of our subscribers.”
Norström and other Spotify execs are quick to point to double-digit yearly subscriber gains worldwide. Take a closer look, however, and many of the wealthier, higher-ARPU countries are showing far slower growth rates, particularly the United States and Western Europe.
Regardless, few countries have been spared price adjustments over the past two years, with a broad swath of Western European countries receiving recent monthly bump-ups.
In some countries, subscribers were simply told to pay more for the same product. In others, they were cajoled with unnecessary extras like ‘free’ audiobooks and AI DJs. None were handed dramatically different experiences.
In Sweden, Denmark, Finland, Iceland, and Monaco, for example, subscribers were informed they’d be paying more in August. Then, this month, Spotify announced that these subscribers were getting ‘access to over 300,000 audiobooks at no extra cost’ — that is, excluding the extra cost they’ve been paying since August.
All of which raises a critical question: without any ‘there there’ to justify the hiked-up prices, will American subscribers push back?
Financial pressure isn’t unique to America, but Americans are definitely feeling price-weary. Suddenly, ‘affordability’ is a fierce political force in the US, swaying mayoral races and presidential popularity polls alike. Will the grind of steadily rising prices, whether for coffee or streaming services, create some unexpected pushback for Spotify?
“America’s middle class is weary,” the Wall Street Journal recently declared, pointing to a large and growing group of Americans “hunting for bargains and spending more carefully.”
“Even though the inflation rate is below its recent 2022 high, certain essentials like coffee, ground beef, and car repairs are up markedly this year.”
So, let’s add streaming music services to that ‘up markedly’ list and hope for the best?
One oft-cited logic within industry circles is that streaming music prices are lagging far behind pernicious inflation. And dominant video streamers like Netflix, HBO Max, and YouTube TV are jacking up prices ad nauseam. But if consumers are so willing to absorb music streaming price increases, why haven’t streaming platforms been more aggressive with their hikes?
Perhaps there’s a reason why Spotify pressed pause on US-based increases in 2025. And, more broadly, has lagged behind its video streaming peers.
Meanwhile, the subscriber numbers in the US aren’t encouraging.
According to data shared with DMN Pro last month, the pace of US-based streaming music subscriptions has been slowing — with our estimates showing a sluggish 1-2% year-over-year growth rate in Q3. Even worse, the slowdown is getting worse by the quarter, suggesting a nasty combination of subscriber saturation and increased price sensitivity.
Enter Apple Music, which could be playing an aggressive pricing game.
The Financial Times says Apple is also under pressure to hike its prices. But sources are suggesting a possible price-wedge play ahead.
Currently, Apple Music’s mainline monthly subscription tier is a dollar cheaper than Spotify’s ($10.99 vs. $11.99). Even Amazon Music has a dollar discount for Prime subscribers, suggesting a serious competitive price play ahead. Both mega-companies have broad subscription, shopping, and hardware packages to feed — in that context, is it worth upsetting those valuable ecosystems for an extra buck, or is it better to use a cheaper price to attract and retain more converts?
It’s also worth noting that the last time Apple Music increased its prices in the United States was in October of 2022 — more than three years ago. If Spotify pulls the trigger on another price increase, will Apple smartly continue to stay put — and use its upcoming Super Bowl sponsorship to woo price-sensitive subscribers with a $2 discount?
For Spotify, hiking prices again is like going for it on 4th down. Maybe there’s a payoff, but it’s risky.
