Investing.com — U.S.-listed shares in Spotify (NYSE:) rose in premarket trading on Tuesday after Bloomberg News reported that the streaming music group was planning to roll out a new, more expensive premium tier.
Citing a person familiar with the plan, Bloomberg reported that users will be charged at least $5 more per month to access the service. Higher quality audio will be one of the perks given to customers who choose to pay for the tier, the report added.
Most of the current subscribers to Spotify’s premium service, which includes ad-free listening on the digital music platform, are expected to remain on their plans, Bloomberg said.
The report comes after Spotify announced earlier this month that it had raised the price it charges for premium in the U.S. On a monthly basis, an individual subscription to the plan will now cost $11.99, up from $10.99. Its duo plan is now set at $16.99 a month from $14.99, while its family plan will run consumers $19.99 instead of its prior price of $16.99.
In an email cited by Reuters, Spotify defended the hikes, saying they will help the company invest in developing its products and features. The Swedish group has also recently reined in marketing expenditures and laid off workers in a bid to bolster margins.
Spotify reported quarterly gross profit above 1 billion euros for the first time ever in April, but the reduced marketing spending weighed on its number of monthly active users.