Spotify is set to test a price increase for its family plan, upping the cost by around 13% in some Scandinavian markets, Bloomberg reports. The price increase is designed as a limited test to figure out whether it might be able to roll out higher pricing for its service globally. The report notes that the higher prices might not be made permanent or roll out anywhere else, depending on the result of the limited test.
The music-streaming company has good reason to give higher prices a shot: It’s consistently a money-losing company, despite having the largest user base of any music streaming service around. That’s more important now that the company is a publicly listed entity, and as it seeks to move toward profitability as a result.
In video streaming, Netflix has managed to consistently increase prices and retain subscribers over the years as it shifted from seeking growth to driving more revenue. But Netflix’s offering is currently more or less unique in the market, and its costs to consumers still far undercut the alternative — a traditional cable or satellite TV subscription.
Spotify is acting in a very different environment, with competitive services on offer with very similar value propositions from companies, including Apple, Google and Amazon, that all use these primarily as complements to other businesses, rather than as money-making enterprises in themselves.