Two US senators have some questions about Spotify’s price bump
Tech Team / Android Authority
TL;DR
- Last year Spotify introduced audiobook access and raised pricing for Premium plans.
- While there was still a music-only Basic option, these senators don’t think consumers were made adequately aware.
- They also accuse Spotify of orchestrating the whole change to lower its payouts to musicians.
Streaming services raising their prices is just as inevitable as death and taxes, and year after year, we slowly end up paying more and more for that access. While we may not like it, at least these price bumps are usually a pretty straightforward affair. But around this time last year, Spotify started charging subscribers more in a way that felt particularly sneaky. Now it turns out that a couple US senators haven’t forgotten about that mess, and are petitioning the FTC to step in.
It used to be that a Spotify Premium plan cost subscribers right about $11 a month. But last year Spotify introduced audiobooks, and used the opportunity to justify a change to its plans and pricing. The company raised its Premium plan by $1 to $12, and for that you’d get access to 15 hours of audiobook streams every month.
What if you don’t care about audiobooks, and pay for Spotify because you just want music? It turns out that Spotify quietly introduced a new Basic plan that kept the old $11 pricing and didn’t include this audiobook access, but you’d have to manually switch your account over — if you didn’t pay attention to what was happening, you’d end up on the new $12 plan. And frustratingly, this is only an option for existing users, and new sign-ups have audiobooks forced upon them, like it or not.
So where do a couple senators come in? Senators Marsha Blackburn of Tennessee and Ben Ray Luján of New Mexico have written a letter to the FTC’s Andrew Ferguson, asking that the agency look into what Spotify did (via TechCrunch). The message asserts that consumers were not adequately notified of the changes at the time and the options available to them.
In an interesting twist, the senators go on to accuse Spotify of making this change not only to directly increase revenue from subscribers, but also to wriggle out of paying its rightful due of royalties to musicians.
Apparently the bundling of the Premium tier with audiobook access, combined with offering a relatively expensive $10/month audiobook-only plan, allows Spotify to pay a lower rate on music royalties than it would if most users were still on music-only plans. While that’s a particularly cynical interpretation, it’s also an incredibly business-savvy one, and we’ll be very curious to hear what the FTC has to say about this theory.
Did you make the switch to Basic or keep Spotify Premium and enjoy the audiobook access? Let us know down in the comments.
