On Tuesday, Spotify CEO Daniel Ek announced that the company is ready to raise prices on its monthly subscribers.
“I think we are ready to raise prices, I think we have the ability to do that, but it really comes down to those negotiations” with major music industry stakeholders, Ek said during a conference call discussing Spotify’s first-quarter earnings, according to Billboard.
The outlet reported, “Some of the music industry’s top executives, including Robert Kyncl at Warner Music Group, have criticized Spotify and other streaming services for not raising prices, effectively contributing to undervaluing music.”
Spotify reported total revenues of $3.3 billion for the first quarter of 2023, which is a 14% hike from 2022. However, it is slightly lower than the company expected as macroeconomic fears crimped Spotify’s advertising business by around $20 million.
“We did raise prices in 46 different locations and markets last year, and even in those markets we were still out performing,” Ek said. “I feel really good about our ability to raise prices over time—that we have that ability—and we have lots of data now that backs that up. We may have been marginally helped by being a lower-cost provider, but it isn’t a primary part of our strategy and it’s not something that we’re thinking about.
He added, “Instead, we’re working with our label partners to work … to figure out what’s the best opportunity to do that. And that’s a more complex trade. When the timing’s right we will raise it.”
Billboard concluded, “Monthly active users (MAUs) were up 22% to 515 million this quarter versus the year ago quarter, including a net addition of 26 million new users.”