Spotify Is Now Competing With Netflix, YouTube, Facebook, Amazon, Snapchat…

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Spotify has announced that it is introducing video content on its Android app this week, followed by the iOS app by the end of next week in the U.S., the U.K, Germany and Sweden. The new video content will be available to all users.

According to Shiva Rajaraman, Spotify’s VP of Product, the company over the past several months has been gradually testing video on its apps.  Overall, these pilots involves less than 10% of the total user base four launch markets.  The content consists of short clips, however some companies are said to be developing original content exclusively for Spotify.

The Swedish music-streaming service had originally announced the plans to begin distributing videos and podcasts in May, with a lineup of traditional and digital content providers, including ESPN, Comedy Central, the BBC, Vice Media and Maker Studios.  However, although Spotify planned an earlier launch of its video content, Rajaraman says the delay was all part of the plan.

“We are at the end of a journey of testing,” said Mr Rajaraman. “We are going out effectively as planned. Our goal was largely to get a wide breadth of content and experiment and test.”

Over the past several months, Spotify have learned that presenting relevant videos based on the music people listen spurs people to watch clips.  The same is true for videos tied to music.  Spotify also found that it was offering far too many ways for people to find video, an option overload that cooled uptake.

In order to smooth out those issues, the company has focused on categoriing video content and creating programming packages, like ‘News of the Week’ or ‘Laughs at Lunch,’ Rajaraman said.

Although Spotify has a large following and is a key player in the streaming market with 75 million users globally and over 2o million subscribers, the company is new to the offering of video content.  Accordingly, it will take time for Spotify to compete with other platforms that dominate web video, including Netflix.

There’s also a far different usage expectation.  Spotify is currently a music-listening app, and one that is often running in the background.  But, the company is now entering into a crowded realm, with platforms like YouTube, Facebook and Snapchat all jockeying for dominance and well-established among users.

“We are doing fine on monetization.  This is primarily a demand play.”

Rajaman has already acknowledged that users will require some consumer training and is working on ways to adjust its users into navigating through its new services.  “Obviously our primary user is a music fan, and they are not necessarily leaning in and looking into the app,” he said. “So there are no particular recipes for how to get this right.”

Spotify is wisely offering the video content to all its users ad-free, as it primarily sees video as a way to expand its audience and get existing users to spend more time with the app.  “This [launch] is fundamentally about giving music fans what they want,” said Mr. Rajaraman.  “We are doing fine on monetization.  This is primarily a demand play.”

 

This jump into web video is a major leap for Spotify.  Their focus on diversified services for their users could be critical for their growth and expansion, and will also set them apart from their competitors.  Whether Spotify can re-establish itself as an all-round entertainment service is another question entirely.

2 Responses

  1. Remi Swierczek

    …and OWN stupidity!
    Daniel Ek’s DOPE can generate at the most $20B in revenues.
    Strange for MBAs at Apple, Amazon or Google to not to see the income limitation of (ALL INCLUSIVE) subscription streaming.

    Reply
  2. Anonymous

    “creating programming packages, like ‘News of the Week’ or ‘Laughs at Lunch,’”

    Here’s a wild guess, but don’t you think people prefer… music videos instead?

    Reply

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