Everything from coffee to a used car is more expensive these days, and now your music streaming service is too. Spotify announced this week that it will raise prices for U.S. subscribers – again.
Spotify Premium plans will jump up to $12.99 from $11.99 starting with the next billing date. The streamer last increased prices for U.S. users in 2024 after a decade-plus run of charging $9.99 for ad-free listening on its premium individual streaming plan.
The main individual plan isn’t the only Spotify subscription getting a price hike. Discounted student plans are getting bumped up to $6.99 from $5.99, the Duo two-person plan will go to $18.99 from $16.99 and the streamer’s Family plans will hop to $21.99 from $19.99. Users outside the U.S. in Estonia and Latvia will also see prices go up next month.
Spotify offered little in the way of explanation for the pricing changes. “Occasional updates to pricing across our markets reflect the value that Spotify delivers, enabling us to continue offering the best possible experience and benefit artists,” the company wrote in a blog post announcing the new pricing scheme.
The early 2026 pricing changes are the third time Spotify has raised prices for U.S. listeners since launching in the country in 2011. Two of those price hikes were back to back $1 increases, one in 2023 and one in 2024. In 2024, Spotify explained that the service would “occasionally” update its pricing in order to “continue to invest in and innovate on our product features and bring users the best experience” – language echoed in its short statement on the latest price increase.
Why is Spotify raising prices?
Spotify isn’t explaining much about the decision to tack another dollar onto its core premium subscription service, but the company is in a very different place now compared to when it was duking it out with Pandora in the dark ages of music streaming more than a decade ago.
Now, the Swedish company is the global dominant force in streaming audio, boasting north of 713 million users and 281 million paid subscribers worldwide – up from 252 million in 2024. Apple Music and Amazon Music are the next closest competitors, but Spotify sits pretty with a much bigger share of the market.
As a household name at this point – a level of brand recognition boosted even further by its genius flourish of marketing, Spotify Wrapped – Spotify will be increasingly hard-pressed to reach new subscribers in super mature markets like the U.S. Like other public companies, Spotify is beholden to a set of shareholders who want to see line go up – and it’s sort of that simple. The company needs to squeeze more money out of its entrenched, very popular subscription service, all while likely approaching a saturation point in markets like the U.S.
Changes afoot for the Swedish streamer
Last November, the Financial Times reported that another price jump was on the way for Spotify subscribers in the U.S. “Questions around the timing of the potential US pricing step-ups… have taken a toll on sentiment,” Deutsche Bank analysts observed late last year. Analysts at JPMorgan estimated that another $1 price hike in Spotify’s U.S. market would net the company an additional $500 million in revenue.
Another big factor: Spotify’s Founder and CEO Daniel Ek announced last September that he would step down from his role after steering the company through two decades of explosive growth. Entering 2026 without its longtime leader, Spotify wants to signal to investors that stability and sustainability are the name of the game.
In Spotify’s November earnings report, Ek emphasized that Spotify’s business is “healthy” and focused on growing its profit and revenue. “It all comes back to user fundamentals and that’s where we are: 700 million users who keep coming back, engagement at all-time highs,” Ek said. “We’re building Spotify for the long-term.”
After this week’s price increase, Wall Street will likely agree. But in an age of mounting inflation stress, yet another price hike may not go down easy for Spotify’s already financially exhausted U.S. users.
Discover more from The Veteran-Owned Business Blog
Subscribe to get the latest posts sent to your email.
You must be logged in to post a comment.