Spotify on Monday increased the price of its premium tier in the United States, the Swedish music streaming service’s latest move to improve profit margins.
In its largest market by revenue, the company raised the prices of its Individual plan from $10.99 to $11.99 per month, its Duo plan from $14.99 to $16.99, and its Family plan from $16.99 to $19.99.
Spotify has relied on promotions and big investments to drive user growth, but in recent months it has been trying to improve profit margins by slashing marketing costs and cutting jobs.
Shares in the company, which competes with services from Apple and Amazon, rose more than 4%.
“Increasing the price of Premium Individual allows us to continue investing in and innovating our products and features,” Spotify said in an email it plans to send to U.S. subscribers within the next month.
Spotify’s U.S. revenue is expected to grow nearly 11% in 2023 to 5.23 billion euros ($5.69 billion), according to its annual report.
The company offers a free, ad-supported service with limited functionality, as well as a subscription-based paid service with full access to all features, with premium subscribers generating the majority of its revenue.
Analysts expect the streaming giant can drive further growth by offering customized subscription plans based on consumer preferences in areas like music, audiobooks and podcasts.
The company curbed marketing spending and helped its quarterly gross profit exceed 1 billion euros ($1.09 billion) for the first time in April.
The company expects its premium subscriber base to grow 14% to 239 million, bringing its monthly active users to 631 million in the second quarter.
