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How Spotify Prices the Subscription for Two Sided Markets
Episode 117 of Pricing Power dives into Spotify's dual-pricing strategy: how it balances free ad-supported tiers against premium subscriptions while keeping artists, labels, and listeners in the same ecosystem. Lucas breaks down the economics of the two-sided market—why Spotify pays roughly $0.003 to $0.005 per stream, the role of the 'bundled subscription' loophole in publisher royalties, and how the recent price hike to $11.99 per month for individual plans shifts the margin calculus. Luna challenges whether Spotify can ever achieve music-industry gross margins above 30…
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