Spotify will launch another test of a subscription price-increase in Scandinavia, according to a Bloomberg report published yesterday. While the company hasn’t itself announced the plans, Bloomberg cited several ‘people familiar with the matter’ as suggesting that the test will see the cost of a family plan rising by around 13% – so from €14.99 a month to €16.99 most likely.
We said ‘another test’ because in April 2018, Spotify started testing a 10% rise in the cost of its monthly (non-family) subscription in Norway. That hasn’t since been replicated across the company’s global business, however.
Family plans are a touchy subject for music rightsholders in 2019: the fact that up to five people can use Spotify at a monthly average-revenue per user (ARPU) of just under $3 does cause concerns – especially in an era where in many markets, people are living with their parents for longer into adulthood, while the costs of buying a home or even renting alone means many friends are cohabiting on a longer-term basis too.
The theory might be that raising the price of a family plan won’t get much pushback from users (who are still getting a good deal compared to the price of individual solo subscriptions) but will make an impact on Spotify’s service-wide ARPU – which has also been under pressure from lower prices in the company’s push into developing markets.
Quite how much of an impact will depend on how many Spotify subscribers are on family plans, which is not a figure that the company has shared publicly. In July 2018, research firm CIRP claimed that as much as 24% of Spotify’s subscribers in the US were on a family plan, although that was based on a survey of 500 Spotify users, 35% of whom were current subscribers (so only around 175 people answering the question about what kind of plan they were on.)
The Scandinavian tests will also be crucial, but given the need to parse their results, any global family-plan increase (if it happens) would perhaps be something for Spotify to introduce in 2020, rather than this year. But with licensing renegotiations in the air, never say never – a family-plan increase could be a relatively easy win in the fight to keep labels onside with Spotify’s wider growth strategy.
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