Spotify Pricing Staying Put

Digital music service is set on its current prices as reports spread that the company is working on a browser-based version.

Spotify is set on its current prices as reports circulate its working on a browser-based version of its subscription service. Well, for the most part.

Sources say there is no indication Spotify plans to deviate from the industry standard pricing structure of $5-$10 per month for PC/mobile access. As one person put it, the company could, in theory, change the pricing but would have to absorb the losses because labels would not change their licensing agreements. A unilateral price change seems far-fetched, however. Spotify always has worked in close partnership with labels. This is one of the last digital music services you could expect to have an antagonistic relationship.

But one source also said Spotify is "kicking around" the idea of "family plan" pricing that would give a discount when additional accounts sign up under a master account. We've heard this before. That news first arose back in March when the Verge quoted Spotify chief content officer Ken Parks as saying family plan pricing was "definitely coming," though he did not offer specifics. Six months later, Spotify has not introduced family pricing, though rumors persist. In any case, there is a precedent here if Spotify goes down that path: In August 2011, Rdio introduced family plans of two accounts for $17.99 per month or three accounts for $22.99 per month.

Spotify had not returned e-mail seeking comment.

News spread during the weekend -- first at TechCrunch, then at the WSJ's All Things D -- that Spotify is planning to launch a browser-based version of its service in the near future. (The TechCrunch article included a rumor that Spotify also might lower its subscription price.) Adding browser access would be a big step. Since its launch, Spotify has required computer users to download and install its desktop application. Many of its competitors are browser-only or browser-first services that have the standard array of mobile apps (and mobile, not on desktop apps or browsers, is where these services really deliver their value).

As for pricing, the $5-$10 per month for PC/mobile access looks pretty fixed for individual subscriptions. Deviations from the norm come from things like volume discounts (such as family plans) and subsidies. Partnerships with mobile carriers, electronics manufacturers and brands deliver subsidies that lower the cost of premium subscriptions for new users. And although hidden from view from consumers, lower prices result when services (Muve Music, for example) are able to negotiate lower royalty rates based on their ability to deliver high volumes of new consumers.

Prices do come down, of course, even when the standard list price stays the same. Spotify has done some partnerships in other markets that effectively lower the price of its premium price tier. In fact, next month Spotify will launch with Deutsche Telekom in Germany a bundle of mobile service and Spotify premium for €30 per month that's paid in the monthly carrier bill.

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