Spotify Technology intends to raise prices on its plans by about $1 to $2 a month in five markets including the UK, Australia and Pakistan by the end of April, Bloomberg News reported Wednesday, citing people familiar with the matter.
Shares of the Swedish music streaming service, which competes with rival services from Apple and Amazon, rose more than 5% on Wednesday.
Spotify will raise prices in the United States, its largest territory, later this year, according to the report.
The company is also going to introduce a new basic tier that will offer music and podcasts — but not audiobooks — for the current $11 monthly price of an individual premium plan, the report said.
The new basic tier is the first of what will be several new pricing options from Spotify, the report added.
Under the new pricing, individual plans will go up by about $1 a month, while family plans and so-called duo plans for couples will rise by $2, the Bloomberg report added.
On a monthly basis, the company offers premium plans including $10.99 for an individual, $14.99 for duo and $16.99 for family in the US, according to the company’s website.
Spotify declined to comment on the report.
CEO Daniel Ek said earlier in February the company has “plenty of levers to pull, including price increases,” adding the investments in the podcasts were a drag on the business in 2023.
The company offers an advertising-supported free service with limited features and a subscription-based paid service that gives access to all its functionality, with premium subscribers accounting for most of its revenue.
A potential price hike could help push for profitability at the company that is expecting strong growth in subscribers.
Spotify in February forecast a near 14% jump in premium subscribers to 239 million in the current quarter, which was above estimates of 238.3 million.
The company has introduced offerings including podcasts and audiobooks in a bid to cut reliance on the music industry and gain more users.
It has content licensing deals with firms such as Universal Music Group, Sony Music Entertainment and Warner Music Group, with content from such companies accounting for about 74% of audio content streamed on Spotify’s platform as of Dec 31.