Description

Spotify Hikes Premium to $12.99: Smart Move or Subscriber Backlash Incoming?

Spotify Technology is increasing the price of its U.S. Premium subscription by $1 to $12.99 per month starting February 2026. This marks the fourth consecutive year of annual $1 price hikes in the U.S., positioning the streaming platform to further enhance its gross margins and subscription ARPU (Average Revenue Per User). While this move comes amid a broader slowdown in the company’s revenue growth guidance—Q4 2025 revenue is expected to rise just 6%, down sharply from prior periods—it reflects a deliberate strategy to prioritize long-term profitability over short-term top-line expansion. Analysts, including Oppenheimer’s Jason Helfstein, believe these recurring price increases, especially in a resilient user environment, could help reinvigorate investor confidence. However, the risks remain material. Slowing user growth, subscriber churn, and rising competition from rivals like Apple Music, Amazon Music, and YouTube Music could limit upside.