“Why Spotify May Raise Prices Soon to Meet Demands of Music Industry”

Since 2011, Netflix has doubled in price. During the same period, Spotify has remained at the same level. But now that can change.

Since 2011, the streaming service Netflix has doubled in price from the equivalent of just under eight dollars per month to sixteen dollars now. But Spotify, the world leader in music streaming, has remained at the equivalent of 10 dollars per month and user.

It reports Bloomberg.

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The music industry is collapsing

A few years ago, the music industry was booming – thanks in large part to streaming services. The music giant Universal Music Group (UMG) rose by 20 percent in sales two years ago. In the most recent quarter, instead, revenues fell.

Warner Music Group (WMG) is America’s third largest music producer. They grew by double digits last year, but since the fourth quarter of last year, growth has completely stopped.

While things were better for Sony, things are shaky for the industry. And that has made them look for alternatives to Spotify, which is the US and Europe’s largest music streaming service.

Music companies’ shares have fallen by double digits in the past year as a result.

The companies are sharpening their knives against Spotify

Now they are sharpening the knives to try to compensate for the losses.

One method that the major companies hope for is that the streaming services will give more money to recognized artists than to hidden ones.

Ed Sheeran, Beyonce and The Weeknd should get paid more per song than some unknown artist who happened to catch wind of a viral tiktok, they think.

But it may force Spotify to raise the price of its streaming service, which has remained at the same level as it was in 2011 – the equivalent of $10 for US users.

Success story

And it has been a success story so far. In the 90s, the average customer spent $40 a year on CDs. Now, instead, people spend an average of 50 dollars on music via streaming services. And that’s an average in the world. The average is even higher in the US and Europe.

But now the music companies and their artists want to be paid more.

Spotify is cracking at the seams

Daniel Ek, who is the founder and CEO of Spotify, has flagged that there may be price increases shortly to meet the demands of the music industry.

“It’s only a matter of time,” writes Bloomberg.

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