Spotify Premium Price Increase: Sizing It, Choosing Who Pays and Rolling It Out

You are a product manager at Spotify, and you have been asked to raise the price of its paid subscription. How would you approach the increase: deciding how much and for whom, rolling it out, and knowing whether it worked? ```hint Find the break-even first Before choosing a number, work out how many paying subscribers the increase could cost before it stops paying for itself, and which subscribers are most likely to cancel or downgrade. ``` ### Clarifying Questions - What is driving the increase: a margin or revenue target, rising royalty costs, or new value being added to the subscription? - Is this one market or a global change, and does it cover every plan (Individual, Duo, Family, Student) or only some? - Is there a target size in mind, or is the amount mine to propose and defend? - Should existing subscribers move to the new price, or only new sign-ups at first? ### What a Strong Answer Covers - The objective behind the increase and the markets and plans in scope - A proposed size backed by break-even arithmetic and evidence on competitors and willingness to pay - Different treatment for segments with different price sensitivity, such as heavy and light listeners, existing and new subscribers, and each plan - A staged rollout with a control group, clear communication and stop rules decided in advance - Metrics that look past the first month: lasting churn, downgrades to free, new-subscriber conversion, and guardrails on sentiment and support load ### Follow-up Questions - Churn in the first launch market comes in at twice your assumption. What do you do next? - How would the plan change in a price-sensitive market where a local rival charges much less? - Would you rather raise the base price or add a higher-priced tier with extra features, and why?