The Drum’s Daily Briefing: Spotify set to raise prices while musicians protest AI
Quickfire analysis of the brand, marketing and media stories that might just crop up in your meetings, brought to you today by editor-in-chief Gordon Young.
Spotify is fielding complaints from musicians, while planning to raise prices for its subscription service / Unsplash
Spotify raises prices
In an apparent ‘squeeze ‘em ‘till the pips squeak’ move, Spotify has announced its second subscription price increase in a year while the music industry demands bigger royalties and it seeks to recoup the investment it has made in audiobooks.
The Swedish company, which despite its fame and ubiquity has never posted an annual profit, will charge subscribers $2 a month more in five markets, including the UK, Australia and Pakistan, before raising prices in the US later this year, Bloomberg reported.
It will also launch a discount plan that will offer Spotify services without audiobooks. Existing subscribers were offered 15 hours of free audiobook listening a week.
One wonders if the strategy of incremental price increases may be a cautious way of testing how price-sensitive its subscribers are. But the company will no doubt hope there will be more capacity to raise prices to cover royalty fees, which amounted to $9bn last year.
Musicians tackle AI
Could music royalties soon be a thing of the past? More than 200 artists have signed a letter to AI companies asking them to stop using their songs to train their models.
The music industry ecosystem, they say, is at risk of destruction. The letter was signed by the likes of Billie Eilish, Smokey Robinson and Katy Perry. Emotive stuff. To support the campaign, The Drum spent all of 60 seconds asking Suno.AI to compose this song to highlight the fears.
Dr Martens to give stock exchange boot?
Dr Martens, which once had a £4bn ($5.06bn) valuation when it first floated, should leave the stock market according to one of its investors. The brand, which now has a value of around £800m ($1.012bn), has struggled with supply problems and maintaining relevance in the fickle US fashion market.
The Telegraph reported a letter sent by investor Mario Cibelli of Marathon that said the company’s earnings would be higher if it quit the public markets or became part of a larger multi-brand holding company.
He said a strategic buyer could add ‘further scale to operations, create new synergies and eliminate unnecessary overhead.”
Royal Mail’s stamp of disapproval
In an age of AI, the Royal Mail seems engaged in a battle from another time. It has announced proposals to reduce deliveries of its second class letter to three days a week, as opposed to six.
The plans would cancel Saturday deliveries and reduce the rest to every other weekday. It has also said it plans to reduce the delivery speed of its bulk delivery mail to arrive within three days instead of two.
The company says the changes are essential if its business is to remain sustainable. However, the proposal has been met with scorn by the likes of the Greeting Card Association and magazine publishers. They fear they will be forced on to a higher first-class tariff to maintain time-sensitive deliveries – in turn, threatening the sustainability of their businesses.