Spotify Announces Price Hike, Right After CEO Infuriates Music Fans By Claiming The Cost Of Creating ‘Content’ Is ‘Near Zero’
Spotify has announced a new price increase for subscribers in the United States, just a day after CEO Daniel Ek sparked a backlash online with a post on value.
On Sunday (June 2), Ek infuriated Spotify users with his post, which began: “Today, with the cost of creating content near zero, people can share an incredible amount of content.” He went on to talk about the longevity of big ideas and art, but it was the “almost zero” line that caught everyone’s attention.
Ek’s post immediately received feedback from users, who condemned both him and Spotify. Singer KT Tunstall was one of many musicians who clapped back and said, “Anyway, I don’t make ‘content’. I make music.”
Now that the cost of creating content is near zero, people can share an incredible amount of content. This has piqued my curiosity about the concept of long shelf life versus short shelf life. Although much of what we see and hear is quickly becoming outdated, there are…May 29, 2024
Of course, music is not free to create; in many cases a song can be years in the making. Its recording could be the result of years of learning to play or write, practice or perform, and anything else that makes a song’s existence possible.
The fact that it is now possible to record music at home does not negate this; it is no more accurate than saying that the cost of writing a novel, making a movie, or creating any other form of art is almost zero. However, the anger of many musicians and music fans may not make even the slightest dent in Spotify’s subscriber numbers.
Spotify is raising prices again in the US
That said, Spotify users in the United States may have been given another reason to think about a switch, because as the furor over Ek’s comment continues to rage, the streaming service announced it is raising prices for a second time increases in a year.
The standard Premium Plan for one user increases by $1 to $11.99, the Duo Plan increases by $2 per month to $16.99, and the Family Plan gets the biggest increase, from $3 to $19.99 per month. Students are safe from this latest price increase, with that discounted plan still $5.99 per month.
Spotify already has the increased prices in effect if you’re new to the service, and within the next 30 days, current subscribers will be notified of the change and the price increase will go into effect.
The company claims that the price increases should ensure that it can still “invest and innovate in our product features” and deliver the best experience. But given Ek’s comments about “the cost of creating content being close to zero,” you have to wonder why Spotify needs more money.
Spotify is less vulnerable to ‘churn’ than Netflix and co
Spotify is benefiting from an interesting phenomenon in streaming: users of music streaming services are much less likely to switch streamers than users of TV and movie services. According to research agency AntennaLess than 1.5% of Spotify subscribers switched providers in April, and the average churn rate (the percentage of people who switch) remains around 2% throughout the year. Unlike TV and movie streaming, where we can be quite fickle, people tend to sign up for a music service and then stick with it.
A lot of that is because there are real barriers to switching services. When you have hundreds of playlists and a recommendation engine that knows what you like, switching to a competitor means starting from scratch or painstakingly recreating what you already have.
At the same time, there are tools to migrate playlists, but it’s still a lot of admin work if you’re a long-time user. And then you haven’t taken into account the extra features Spotify offers, such as Spotify Connect, podcasts and audiobooks.
The sad fact for musicians is that people don’t really care about the bigger picture: if a streamer has the songs they want to play and if switching streamers is inconvenient, they’ll stay where they are – even if prices rise. up again.