Spotify announces price hike, right after CEO enrages music fans by claiming the cost of creating 'content' is 'close to zero'
Spotify has announced another price hike for subscribers in the United States, just a day after CEO Daniel Ek sparked an online backlash with a post on X (formerly Twitter) that suggested the music millions of subscribers pay to listen to was "content" that had little value.
On Sunday (June 2) Ek outraged Spotify users with his post, which began, "Today, with the cost of creating content being close to zero, people can share an incredible amount of content." He continued by talking about the lifespan of big ideas and art, but it was the "close to zero" line that got everyone's attention.
Ek's post immediately garnered feedback from users, who condemned both him and Spotify. Singer KT Tunstall was one of many musicians who clapped back, posting, "I for one don't make 'content'. I make music."
Of course, music isn't free to create; in many cases, a song can be years in the making. Its recording could be the result of years spent learning to play or write, practicing or performing, and everything else that enables a song to exist.
Just because it's now possible to record music yourself at home doesn't negate that; it's no more accurate than saying the cost of writing a novel, making a movie, or creating any other kind of art is close to zero. However, the fury of many musicians and music fans may not even make the slightest dent in Spotify's subscriber numbers.
Spotify raises prices again in the US
That said, Spotify users in the United States having potentially been given another reason to think about switching, as while the furore over Ek's comment as still rumbling, the streaming service announced that it's raising prices for the second time in a year.
The standard Premium Plan for one user jumps by $1 to $11.99, the Duo Plan jumps by $2 monthly at $16.99, and the Family Plan gets the biggest increase, at $3 to $19.99 monthly. Students are safe from this latest price hike, with that discounted plan still $5.99 a month.
Spotify has already put the increased prices into effect if you're new to the service, and within the next 30 days current subscribers will be notified of the change, and the price hike will go into effect.
The company claims that the price hikes are to ensure that it can still "invest in and innovate on our product features" and deliver the best experience. However, given Ek's comments about "the cost of creating content being close to zero," you have to wonder why Spotify needs more cash.
Spotify is less vulnerable to 'churn' than Netflix and co
Spotify is the beneficiary of an interesting phenomenon in streaming: users of music streaming services are much less likely to switch streamers than TV and movie services users. According to research firm Antenna, fewer than 1.5% of Spotify subscribers switched providers in April, and its average churn rate – the proportion of people who switch from it – stays at around 2% throughout the year. Unlike TV and movie streaming, where we're fairly flighty, people tend to sign up for a music service and then stick with it.
A big part of that is because there are real disincentives to switching services. If you've got hundreds of playlists and a recommendation engine that knows what you like, moving to a rival means either starting again from scratch or painstakingly recreating what you've already got.
At the same time, there are tools to migrate playlists, but it's still a lot of admin if you're a long-time user. And that's before you consider the additional features Spotify offers, such as Spotify Connect, podcasts, and audiobooks.
The sad fact for musicians is that people don't really care about the wider picture: if a streamer has the songs they want to play and if switching streamers is a pain, they'll stay where they are – even if the prices are going up, again.
