- Jan 8, 2011
- 22,361
Source: Spotify to Raise Prices in Norway in Test of Customer Loyalty
"Spotify Technology SA plans to start raising prices in Norway next month, a small-market test that may foreshadow increases for its global listeners later.
Prices for new customers will go up by 10 percent in May, and extend to existing users in July, the company said. The increase will apply to all three of Spotify’s paid offerings in the country -- the standard subscription, a student plan and a family plan.
“In order to meet market demands and conditions, while continuing to offer a great personalized service, Spotify will be increasing the price of our premium subscription in Norway,” the company said in a statement. Prices in the U.S. range from $5 to $15 a month.
After going public earlier this month, Spotify is eager to prove to investors that it has a path to profitability. The company operates at a loss due to high royalty payments to the music industry, costs that have hobbled rivals Pandora Media Inc. and Deezer.
Raising prices represents a way to boost sales and margins without seeking concessions from the recording industry. Netflix Inc., another online service with high costs and low margins, has employed price increases to great effect over the past couple years. The company has boosted its average subscriber price by more than 12 percent in the past year."
"Spotify Technology SA plans to start raising prices in Norway next month, a small-market test that may foreshadow increases for its global listeners later.
Prices for new customers will go up by 10 percent in May, and extend to existing users in July, the company said. The increase will apply to all three of Spotify’s paid offerings in the country -- the standard subscription, a student plan and a family plan.
“In order to meet market demands and conditions, while continuing to offer a great personalized service, Spotify will be increasing the price of our premium subscription in Norway,” the company said in a statement. Prices in the U.S. range from $5 to $15 a month.
After going public earlier this month, Spotify is eager to prove to investors that it has a path to profitability. The company operates at a loss due to high royalty payments to the music industry, costs that have hobbled rivals Pandora Media Inc. and Deezer.
Raising prices represents a way to boost sales and margins without seeking concessions from the recording industry. Netflix Inc., another online service with high costs and low margins, has employed price increases to great effect over the past couple years. The company has boosted its average subscriber price by more than 12 percent in the past year."
