Sweden is Spotify’s homeland, and one of the most mature music-streaming markets: 90% of its recorded-music revenues in 2018 came from streaming, fuelling 4% overall growth. So it’s fascinating to see the CEO of IFPI Sweden, Ludvig Werner, calling for a debate on whether Spotify should be raising its monthly subscription price to fuel the next decade of growth.
“Without a price increase in streaming services, I would guess we have a year or two [of growth]. With a price increase and all players in the market negotiating fair prices, I think we can grow for another 10 years,” Werner told Music Ally, in an interview for our latest country-profile on Sweden.
“We have to face [the fact] that there is a limit to how much growth you can have in the number of subscribers. But maybe the next question in the mature streaming markets will have to be: what is the price point that they should have in the marketplace?” he continued. “Maybe it is actually a bit weird to still pay 99 SEK [$10.66] 10 years after [Spotify’s arrival]. Spotify launched with 1.5m songs; now we have 45m songs, podcasts, video. It’s not a music service any more. It is an entertainment platform, almost. And the prices are very, very low.”
Werner has noted that Spotify has tested a 10% price-rise in Norway already, seemingly with “no negative effect” – even though Spotify’s senior management has said publicly it has no plans to make such a rise global. Werner clearly thinks there is potential. “If you raised the price 10% or 30% on music streaming, with the kind of use it gets today we as an industry don’t think that would have any negative impact on the amount of users whatsoever,” he said, albeit while stressing that this applies to “a so-called rich country” like Sweden.