Chapter 1: What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk. With Aviva Insurance.
Spotify has announced a jump in the number of subscribers despite hiking prices in some of its biggest markets worldwide. Many of you will be getting a notification telling you of an increase from £11.99 a month to £12.99 a month and family subscriptions are going up too. Emma Howard is an economics lecturer at TU Dublin and she joins me now. Hello Emma. Good morning Clare.
Is your Spotify subscription one of those things that you feel you can't really do without?
It is.
Chapter 2: Why is Spotify experiencing a surge in subscribers despite price hikes?
To be honest, I actually use my Spotify subscription a lot. I think like a lot of users, I get a lot of value out of it. So I have a family one. So that allows you six premium accounts. And as he said that the cost of that, now I did, I just sort of rolled my eyes because the cost of everything is going up. So I did get the email saying it was going up three euros.
So that's a 15% increase for the subscription.
Chapter 3: What are the new subscription prices for Spotify plans?
That's the family subscription. That's the family one, yeah. Now, as you mentioned, there are kind of a number of different plans. So the individual one has gone up as well. And by a bit less percentage wise, so 8.5 percent, the dual one has gone up by two euro, which is a 12 percent increase. But that also went up two years ago.
So if you look at kind of the overall increase over the last two years, that's a 27 percent increase. And there is a student subscription service as well. So that is 6.99 euro. It stayed the same this year, but that did go up 17% last year. So overall, like over the last two years, there have been significant increases.
However, though, if you look at the Spotify users, though, about 60% of their users overall are free users. So, you know, although like for some people, there's a lot of value out of the premium service, depending on how you use it and how much you use it. There are free accounts available. Now they have restrictions on them. So you do have to listen to ads after I think every three songs or so.
It limits the number of skips you have. But it is an option for people if they don't use it a lot or, you know, they don't mind having those ads being played. So it saves you quite a bit of money.
When we were thinking about this this morning, we were chatting about it on the team. We were thinking about how much money you would have spent in the olden days, Emma, on music. You know, is that the way to look at this? Would you have been somebody who spent money on CDs every month?
I spent a lot and I had a massive CD collection that I had to part with eventually because it was just gathering dust and never got used. But I, of course, I always like to look at the data. So I actually went and crunched the numbers just to have a look. So in 2002,
If you look at the average spend per person, so we had a census in 2002, so I removed the children under 14 and looked at on average in the country, we spent 43 euro per person that year on music. Now, that's for every single adult in the country. So you can imagine there would have been lots of people probably who never bought a CD or spent any money on music.
And there would have been people who spent kind of 10 or 20 times that. So I suppose, you know, depending on your usage, like now with something like Spotify, it's not just music you're using it for because you have with the premium, you have audio books, you have podcasts.
And if you look at their, like how people use it, so the monthly active users, if you look at the average listen time, it's 148 minutes audio per subscriber per day. And one in five people listen to their Spotify several times a day. So if you're one of those users, you're probably getting a lot more value out of your money than you would have been when you were buying music. But
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Chapter 4: How do Spotify's subscription increases compare to past trends?
There are. And, you know, a lot of these services, they get us in with subscription traps. So, you know, a lot I had a look like Spotify at the moment and many others. You know, if you sign up for an individual plan, it's free for the first month and then it auto renews. And a lot of the streaming services or subscription services give us that opportunity.
low or no cost offer to sign up and then it auto renews and we're subject to what's called that status quo bias. We tend to kind of stick with the default and once we've made a decision, we don't tend to think about it again and that money just goes out of our account automatically at the end of each month.
So it is really worth every now and again, you know, every couple of months or so looking at your bank account, looking at what amounts have gone out and figuring out what they're for and then thinking about how much you use it, because, you know, a lot of the time you sign up for these services and. If you think about it, often a month goes by and you haven't used it at all.
So it is actually quite easy now to cancel because consumer protection legislation means that they can't make it very difficult for you to cancel anymore. So it's usually just a couple of clicks. And it's also really easy to resubscribe. So, you know, one thing I do is is when it comes to say like TV streaming is, you know, I'll sign up to Apple because I want to watch a particular series.
I'll watch it and then I'll cancel it. And, you know, I might go back a few months later if if there's something else on I want to watch. So rather than, you know, because you can you could end up having about six or seven episodes. going out of your account every month and it adds up to a huge amount.
Yeah, it's important to keep an eye on it. So Spotify subscriptions are increasing by up to 15% in the weeks ahead, depending on what plan you're on. Spotify Family, £19.99 to £22.99. That's the one you're on, Emma. And the individual plan customers will be paying £12.99 now from £11.99 as it was. Emma Howard, thank you very much for being with us. That's the Economics Lecture from TU Dublin.
The Clare Byrne Show. With Aviva Insurance. Weekday mornings at 9. On Newstalk. Conversation that counts.
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