Spotify (SPOT) stock jumped 5.6% on Monday following the announcement of upcoming price hikes for its US subscription plans. Starting in July, prices will rise between $1 and $3 per month. Family plans will see the largest increase, going from $16.99 to $19.99 per month. Duo plans will increase by $2 to $16.99, and Spotify Premium will now cost $11.99, up by $1. This follows a previous price increase last summer, which had minimal impact on subscriber growth. Spotify explained the hikes as necessary for continued investment and innovation in product features to enhance user experience.
The news comes after Spotify turned a profit in the first quarter, exceeding key metrics and forecasting higher revenue and operating income for the current quarter. Over the past year, Spotify has committed to multiple price increases, layoffs, and other measures to improve profitability. CEO Daniel Ek highlighted plans to introduce various subscription tiers, such as audiobook-only and music-only options, to attract a broader user base. Ek emphasized that creating more value allows for justified price increases. The company’s stock has surged over 100% in the past year and is up 73% year to date.