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News October 13, 2020

Why is Spotify increasing the cost of its Family Plan in Australia?

Why is Spotify increasing the cost of its Family Plan in Australia?

Spotify has increased the price of its Family Plan subscription in Australia.

For existing customers, it moves from $17.99 to $18.99 from November, although it was applied to new subscribers from October 1.

Launched in 2016, the plan allows subscribers to add up to six individuals in one household.

Referring to the Australian price hike, the company justified the increase in order to “continue offering a unique service” in the region.

“Our pricing varies across regions, reflecting local macroeconomic factors, as well as our commitment to bringing both the best audio content and the highest value to our subscribers with much more to come in the future,” Spotify said.

However, this is in contrast to CEO Daniel EK’s denial during a Q1 earnings call in April when asked if there are plans to increase standard pricing down the track.

“Our primary strategy is growth,” he said, adding that rather than maximise revenue, the company was focussed on the shift from radio to audio-on-demand.

He did confirm that Spotify had conducted some pricing experiments in some markets, citing inflation as one reason, and said the response has been very positive.

“But it’s not something that we’re focusing on in the short term,” he said.

It’s not known if the Australian price rise is just a territorial decision or if it a signal, to investors and the music industry, a broader move to increase revenue across-the-board.


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