Spotify is reportedly readying a new and higher-priced premium plan for its most devoted users.
The new plan, set to be unveiled later this year, will charge users at least $5 per month more, Bloomberg News reported Tuesday (June 11), citing a source familiar with the matter.
That source said this updated plan would offer access to better audio, as well as new tools for managing song libraries and building playlists.
According to the report, Spotify is set to position the new offering as an add-on for existing customers. It lets most users remain on their current Spotify plans, but customers who opt to upgrade will generate additional revenue for the company and its partners.
Bloomberg’s source said the new offering’s pricing will depend on each user’s base plan but will average out to about a 40% increase.
PYMNTS has contacted Spotify for comment but has not yet gotten a reply.
The news comes a little more than a week after Spotify said it was increasing prices for its premium plans in the U.S. to let it invest in product features.
Starting immediately for new subscribers and next month for existing subscribers, the new prices for the plans are $11.99 for Individual (up from $10.99), $16.99 for Duo (up from $14.99), $19.99 for Family (up from $16.99).
“So that we can continue to invest in and innovate on our product features and bring users the best experience, we occasionally update our prices,” Spotify said on its blog.
This announcement came about six weeks after Spotify said on an earnings call that this will be a “year of monetization” after seeing gains in revenue growth, margin expansion and efficiency.
Also on the call, Spotify CEO Daniel Ek stressed the platform’s value enhancements and consumer satisfaction as rationale for the — then still rumored — price increases.
“[…] We think consumers like what they’re seeing from Spotify,” Ek said on the call. “They love the offering, and they feel that the value that they’re getting is more than fair.”
But in spite of consumers’ embrace of streaming, “the competitive pricing approach is not without risks,” PYMNTS wrote last month.
Data from PYMNTS Intelligence’s report, “The One-Stop Bill Pay Playbook: Drivers of Consumers’ Bill Payment Priorities” shows that streaming subscriptions are often the first things to go when consumers face financial constraints.
“Specifically, more than half of respondents indicated they would cancel streaming subscriptions to reduce monthly bills, surpassing any other service,” PYMNTS wrote. “Only 17% expressed a preference for paying streaming bills over other expenses.”