Xuenou > Music > The Ledger: Music Subscription Prices Barely Budged for a Decade. That’s QuicklyChanging
The Ledger: Music Subscription Prices Barely Budged for a Decade. That’s QuicklyChanging
Apple Music may have opened the floodgates on Monday when it announced that it will raise prices on its Apple Music subscription service, as well as Apple TV+ and its Apple One bundle of services. 

The Ledger: Music Subscription Prices Barely Budged for a Decade. That’s QuicklyChanging

Deezer's Earnings Boosted by Streaming Subscription Price Increases

Apple and Amazon certainly had incentive to raise music subscription prices. Apple Music and Amazon Music Unlimited offer high-fidelity audio as a standard feature even though licensing deals with record labels for premium audio are more costly for streaming services, according to industry sources. Unless Apple and Amazon raise prices to offset the lower margins, they must eat the higher costs associated with offering better audio quality. Spotify, on the other hand, does not yet offer high-fidelity audio. Plans for just such a product, called HiFi, have not materialized after announcing the project would come out in 2021. Recently, the company has been surveying customers regarding a more expensive package that would include HiFi, as well as other products.  

But now Apple has effectively given its competitors cover to raise their prices, too — whether they offer high-fidelity audio or not. Deezer already planned to raise prices in the U.S. and Germany this month and in Brazil in December. Still, its competitors’ decisions to raise prices “makes us more competitive,” Deezer CEO Jeronimo Folgueira said during Friday’s earnings call, and “opens the door for further prices increases down the line.” 

Spotify certainly appears confident it can charge more. Thus far, its price increases had results “as good as we would have hoped for,” said Ek said during the earnings call. “We believe we have significant pricing power and we’re offering an amazing consumer value proposition.” Other metrics seem to have convinced Spotify the time is right to raise prices: engagement continues to increase, and Spotify has “the lowest churn of any competitor,” according to Ek. Put another way, Spotify thinks it can raise prices without fear that a significant number of people will walk away.