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Business News Digital
Spotify to experiment with price points across Scandinavia
By Chris Cooke | Published on Friday 16 August 2019
Spotify is reportedly planning another experiment with price increases on its home-turf, with Bloomberg reporting that the streaming service will increase the cost of its family plan by around 13% in the Scandinavian market.
In recent years, the market-leading premium streaming service has been under pressure from many in the music industry to put up its monthly subscription fees, which in most markets haven’t changed since launch.
During that time prices have risen on key platforms in the video-on-demand sector. Meanwhile, in music, things like the family plan and student discount have actually resulted in many users paying less to access Spotify-type services. And, of course, in emerging markets premium users don’t pay anything like the ten pounds/euro/dollar monthly standard.
But there is a big difference between the video services and the music services, in that Spotify has more or less the same catalogue of content as its competitors. The fear, therefore, is that if one service puts its subscription fees up, its rivals will exploit the resulting price difference.
The hassle of having to start over organising a personal library and subscribing to playlists would likely deter many Spotify users – especially more active uses – from defecting to another service just to save one pound a month. Particularly given the chances are high that the other services would ultimately follow suit on pricing. But in markets where Spotify is still proactively growing its user-base, it would make rival services seem more attractive to new customers.
Hence why it is dabbling with price increases in its most mature markets. It previously increased standard, student and family plan rates in Norway last year. Specifics of the new family plan price rise elsewhere in Scandinavia are not yet known, though presumably it won’t apply in Norway.
Spotify generally refers to these pricing tweaks as “tests”. Whether it will seek to employ the learnings of these experiments elsewhere, especially in Europe, remains to be seen. But the music industry in the main would very much like to see that happen, and sooner rather than later.
