Spotify shares fall after raising prices for its premium subscription plans

Spotify (SPOT) stock fell more than 5% in intraday trading on Monday after announcing plans to raise prices for its premium subscription plans.

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Spotify has announced that it will increase the prices of its premium subscription plans by up to $2 per month starting in August.
The streaming service's shares fell more than 5% in intraday trading after the announcement.
The move follows hikes from competitors like Apple Music.

The music streaming platform said it would raise prices by up to $2 or 20% in the United States for some of its offerings. A one-time premium subscription will increase to $10.99 per month from $9.99, while student plans will increase to $5.99 per month from $4.99.

Spotify says it has more than 200 million premium subscriber consumers and they will have a “one-month grace period” before the price increase takes effect. Price increases will also be implemented in other countries including the UK, Mexico, Australia, Canada, Ecuador and Spain.

The Swedish company said the price increases are in reaction to the changing market landscape since its inception in 2008 and the launch of its premium service in 2011.

Spotify's price hike follows those of rival Apple Music. Last October, Apple (APPL) decided to increase the prices of its premium subscription by $1 to $10.99 from $9.99.

In its first quarter earnings report, Spotify said its premium subscribers grew 15% year-over-year (YoY) globally to 210 million, while its revenue total revenue increased 14% to 3.0 billion euros ($3.32 billion).

Despite Monday's decline, Spotify shares were still up more than 100% year-to-date.