Why music streaming services have identical pricing?

Question

Got a notification from Spotify that the cost of my subscription would increase so I went and checked out alternatives. Was surprised to see that everyone charges &pound;16.99 / month; sources:- Spotify https://www.spotify.com/uk/premium/ - Apple Music https://www.apple.com/uk/apple-music/ - YouTube Music https://music.youtube.com/music_premium - Tidal https://tidal.com/pricingLooks like there's price collusion, how are they getting away with it?

mikequinlan · Accepted Answer

In the United States price fixing is only illegal if there is an agreement among two or more competitors. When prices are openly advertised (and announced in advance) it is easy for suppliers to set the same price without any actual agreement.https://www.ftc.gov/advice-guidance/competition-guidance/gui...

elmar · Answer

Because it's a perfect competition market and there are no significant differences between players, they all offer the same catalogue and almost the same user experience.

troupo · Answer

I believe everyone started charging as the most popular streaming service in town.
You can't really go higher because people will switch to the competitor. You can't really go lower because you're probably already losing money (mostly to various licensing deals).
It's like all apps on the app store end up being 2.99 and 4.99 because of the price race to the bottom. Everyone waits for someone to blink first and raise their prices.
Disclaimer, if it's really needed: I work at Spotify.

mytailorisrich · Answer

Companies can align price to competitors' without colluding. Basically, if you check how much others are charging and charge the same then there is no collusion.

_flux · Answer

In addition, they presumably don't want to enter a race to the bottom by undercutting others, as competing by other means (sound quality? selection? brand image?) is less risky.