A screen displays the logo and trading information for Spotify on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 6, 2024. REUTERS/Brendan McDermid/File Photo
(Reuters) -Spotify raised prices for its premium plans in the United States on Monday, the latest step by the Swedish music-streaming service in its push to increase margins.
The company raised prices of its individual plan to $11.99 from $10.99 per month, duo plan to $16.99 from $14.99 and its family plan to $19.99 from $16.99 in its largest market by revenue.
Spotify has been trying to boost its margins in recent months by lowering marketing spending and through layoffs, after relying on promotions and hefty investments to drive user growth.
Shares of the company, which competes with services from Apple and Amazon.com, rose more than 4% in morning trading.
"We're increasing the price of Premium Individual so that we can continue to invest in and innovate on our product offerings and features," Spotify said in an email, which it plans to send to its subscribers in the U.S. over the next month.
Spotify's revenue in the United States grew nearly 11% to 5.23 billion euros ($5.69 billion) in 2023, according to its annual report.
The company offers an advertising-supported free service with limited features and a subscription-based paid service that gives access to all its functionality, with premium subscribers accounting for most of its revenue.
Analysts expect the streaming giant could drive further growth by offering tailored subscription plans based on consumer preferences in verticals such as music, audiobooks and podcasts.
The company's quarterly gross profit topped 1 billion euros ($1.09 billion) for the first time in April after it reined in marketing spending.
Its premium subscribers rose by 14% to 239 million and it forecast monthly active users at 631 million for the second quarter.
($1 = 0.9192 euros)
(Reporting by Jaspreet Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)
