For years, there has been one quick solution to at least partially remedy the low royalty payments most musicians receive from streaming services: Raise subscription prices.
In the past several years, streaming has revived a music industry that had seen its revenue literally cut in half due to illegal downloading and plummeting CD sales. Yet the the US subscription price, which was set at $9.99 per month at the dawn of the streaming age more than two decades ago to mirror the cost of a Blockbuster video-rental subscription, implausibly had not budgeted until recent weeks. In fact, the ground war for market share had become so grueling that streamers were competing in a race to the bottom, via dozens of different plans — including ad-supported, aka free models, student and family plans, bundling and more — all of which added up to less money for musicians and songwriters.
“It makes no sense,” Milana Lewis, CEO of the distribution and payments platform Stem, told variety earlier this year. . “The price of everything else on earth is going up, and they all keep finding new ways to make subscriptions cheaper.” Surveys have shown that users are willing to pay more.
But that is finally changing. On Monday, Apple Music raised its subscription price to $10.99 per month for individuals, with the family plan jumping two dollars to $16.99/month, among other plan increases. YouTube is raising the price of its US Premium Family plan from $17.99 to $22.99 monthly. Deezer, which is a smaller player in the US but the fourth or fifth largest globally (depending on whether one counts China-only Tencent) has raised its prices internationally.
During Spotify’s third-quarter earnings call on Tuesday, co-founder and CEO Daniel Ek said the company is considering one as well.
“When our competitors are raising their prices, that is really good for us,” he said, noting that the company has raised prices more than 40 times in markets around the world.
Raising the subscription price in the US, the world’s largest music market by far, “is one of the things we would like to do and it’s something we will [discuss] with our label partners. I feel good about this upcoming year, and what it means about pricing for our service,” he said, without providing further details.