Music Business

Is $1 enough? Spotify needs to charge $12.99 to keep up with inflation

Spotify has resisted raising its base $9.99 per month subscription price even as Apple Music and yesterday, Amazon Music have.

$10.99 / £10.99 is now the monthly price at the major US and UK streaming services.

$9.99 / £9.99 / €9.99 has been the price to subscribe to the world’s #1 streaming service since it launched in several European countries in 2008 and the US in 2011. Now, independent artists and major labels are unusually united in calling for Spotify to raise prices.

Using the Spotify US launch year of 2011 as a starting date, the cumulative rate of U.S. inflation since then is 30.1%. Using Spotify 2008 European launch, EU inflation is up 31.1%

Effectively, artists and labels earn 30% less from each Spotify subscriber than they did when it launched.

So for Spotify to keep pace with inflation, it – and all other streaming services – would need to charge $12.99 / £12.99 / €12.99 or more per month.

To date, growing payouts from rapid subscriber growth have helped cover most of Spotify’s sins. But growth is starting slow, and the music industry is pushing hard for price increases.

We may learn if Daniel Ek will give in to their demands when Spotify holds its annual Stream On media event on March 8th.

MORE: Amazon Music raises price in US, UK joining Apple. Is Spotify next?

Bruce Houghton is the Founder and Editor of Hypebot and MusicThinkTank, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a professor for the Berklee College Of Music.

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