Slowing growth in the Music industry raises Spotify’s pricing concerns
The music industry, which has experienced a decade of robust growth fuelled by streaming, is now facing signs of a slowdown. The top streaming service is reaching maturity in major Western markets, where Spotify continues to grow rapidly, but struggles to generate significant revenue, particularly in countries like India and Indonesia.
Adding to the challenges, a slowdown in the advertising market further restricts revenue from platforms like YouTube and Spotify. As a result, stock prices of major music companies, such as Universal Music and Warner Music Group, have been affected.
One immediate solution being considered is raising subscription prices. Spotify has maintained its base subscription price at $10 USD while other streaming platforms like Netflix has nearly doubled in recent years. Industry competitors like Amazon and Apple Music have already increased prices for certain plans, while Spotify has raised prices for family and base plans in specific markets.
CEO Daniel Ek has hinted at the possibility of a price increase in the US, with company executives stating it's only a matter of time.
Source: Bloomberg
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