(Reuters) -Spotify said on Monday it would increase the monthly price of its premium individual subscription in select markets from September, as the Swedish streaming giant looks to improve margins.
The subscription price will rise to 11.99 euros ($13.86) per month from 10.99 euros in markets including South Asia, the Middle East, Africa, Europe, Latin America and the Asia-Pacific region.
Spotify's shares rose more than 5% in premarket trading. They have gained about 40% so far this year.
The company
said subscribers will receive an email explaining the price increase over the next month.
Price increases in the past, combined with cost-cutting efforts in recent years, have helped Spotify achieve its first annual profit for 2024.
But the company forecast its third-quarter profit below analysts' estimates last month, as higher taxes related to employee salaries outweighed music streaming demand. It saw an increase in monthly active users and premium subscribers during the second quarter.
Spotify is also benefiting from Apple's approval of the Swedish company's U.S. app update to show subscription prices and external payment links, after a judge barred the iPhone maker from charging commission on off-app purchases.
The audio streaming company's CEO Daniel Ek said this change has led to "a very positive uptick" in the U.S. He also said that if similar rules are adopted in Europe and the UK, it would benefit both Spotify and other app developers.
Spotify has been expanding its library of video content to attract subscribers, including through its partner program, which is designed to help podcast creators by offering them monetization options.
A growing number of creators are joining the Spotify Partner Program, resulting in a significant increase in video content on our platform, Ek had earlier told Reuters.
($1 = 0.8650 euros)
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar)
