Like with any market and delivery method for art under commerce, the world of digital music streaming platforms is always changing. Most recently, a new report from the Financial Times indicates that major record companies are pushing to preserve the profits of the model by pressuring DSPs to raise subscription prices for consumers.
In fact, Spotify has already done this for the beginning of next year. According to FT, the company will raise United States subscription prices in 2026's first quarter. Their last price raise in the U.S. was in July of last year, now at $11.99 a month in comparison to the $9.99 a month price point that it launched with 14 years ago. Also, Spotify has reportedly increased subscription pricing in recent months in other countries like the United Kingdom, Switzerland, and Australia.
With this in mind, it looks like major labels want not just Spotify to continue these protections of profit, but also all other streaming services such as Apple Music. They have competitive reasons to push for these fee increases. Reportedly, record companies argued that current subscription prices have lagged inflation and that video services like Netflix are rendering their price points as too cheap.
According to FT, there's a slow-down in the music industry's decade-long growth spurt from the past ten years. Per the IFPI trade group, the industry's global revenue growth was half as big last year as it was the previous one.
Spotify Deal
Back to Spotify's confirmed price increase, though, they reportedly want to sustain profits for the company with these price increases. JPMorgan analysts reportedly predicted a $500 million boost for the company's annual revenue if they raise their subscription fees by a dollar a month.
"We will act when the time is right for each specific market, and we’ll do it at the appropriate price based on those market dynamics," Alex Norström reportedly stated regarding U.S. pricing during an earnings call this month. He and Gustav Söderström will take over Spotify's chief executive office following the step-down of cofounder Daniel Ek.
In other news, Spotify recently acquired the WhoSampled website, which raised questions within hip-hop and beyond about the future of sampling regulations. There are a lot of massive changes ahead, whether in the micro or the macro.
