![]() Some users may feel that they shouldn’t have to pay to avoid ads.Īs such, they might feel that the subscription plans are more expensive than they’re worth. If anything, the company might make even more money through direct payment via a subscription plan. This is great for the user since they can now listen to music ad-free, and it’s great for Spotify since it doesn’t lose revenue. You’re essentially paying not to listen to ads. To ensure it still has a revenue stream, it requires those who want to forego ads to pay more money. Spotify relies on ads as a revenue stream. However, that convenience comes at a cost. You’re able to listen to song after song without interruption.Īs anyone who listens to music online knows, having a sudden ad interruption can ruin the groove.Īs such, some people find a lot of value in Spotify Premium.īeing able to listen to music constantly without interruption is worth the price. One of the benefits of having a subscription plan with Spotify is that you don’t hear any ads. Spotify is expensive because it provides high-quality audio to its premium users. Since Spotify is spending more money on itself, it needs to receive those funds from somewhere. To stream high-quality audio, the company needs to invest in better software and hardware. Secondly, it costs the company a bit more money to stream high-quality audio. The reason Spotify does this is to attract more people to its subscription plans.įor one, it means Spotify can generate a little more money each month. It saves its best audio streaming for those who pay extra for it. Spotify tends to play songs well on its own, but one of the features it advertises is premium listening. However, it also means that you need to pay extra money to be able to listen to the better versions of the song. Whether it achieves that quality of sound, however, is a matter of the listeners’ opinions. In Spotify’s case, it focuses on premium high-quality sound. There are companies like iHeartRadio, Pandora Radio, Apple Music, and an assortment of others.Įach company’s goal is to have the general public listen to its content rather than to its competitors.Īs such, each company needs a differentiator that sets it apart from the others. There is a lot of competition in the audio streaming market. Spotify is expensive because it has to pay money to artists which cut into its overall profits. Otherwise, it’s not worth running the company. Since it isn’t keeping all the earnings, Spotify has to ensure that it’s still making enough of a profit to operate and flourish. Some of it goes back to the artists who put their content on Spotify. ![]() The money that Spotify generates through ads and its subscription plans isn’t all money that the company is able to keep. This means that Spotify has to pay a lot of money to an artist or two. The more people who listen to a song or podcast, the more royalties the individual earns. It all comes down to how many listens the individual and their music receive. The dollar amount of royalties that Spotify needs to pay may vary.įor example, it may pay a well-known and popular musical star one amount and someone relatively new to the service another amount. Spotify has to pay royalties to anyone who publishes their content on it. Spotify is expensive because of the costs it takes on producing original content. Since it faces high costs, Spotify has to charge high prices for its subscription plans. If the podcast is a flop, then that’s money the company wasted. The benefit is that the celebrity can bring in a large audience which can help Spotify earn some of its money back. Spotify may end up paying a lot depending on the content in question.įor example, hiring a celebrity to host a podcast could become very expensive. Since it makes the content itself, these are all costs that Spotify has to pay in addition to its normal operational costs. It brings together celebrities and other charming hosts to discuss a range of subjects. Spotify produces its own podcasts and shows. Let’s look at these factors in more detail. Spotify is expensive due to its need to fund original content, its licensing payments, its different features and their costs, the region you live in, and whether you split the costs with the family plan or not. Its cheapest plan is the Student plan which costs $4.99 a month.įinally, the family plan costs $15.99 a month. Spotify has four different plans from which to choose. Why Is Spotify So Expensive? (10 Reasons) If you want to use their Premium service, however, then you’ll find that using Spotify can be quite expensive. Spotify offers tons of music as well as audiobooks and podcasts. If you love music, then there’s a good chance that you use Spotify.
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