There goes Spotify’s video service plan.
Swedish website BreakIt is reporting that Spotify has dropped several top video partnerships almost a year after its introduction. It appears that Spotify is taking a step back from providing video content.
The Swedish company decided against renewing major partnerships with ESPN and Vice Media from its video platform. Spotify first announced their dive into video at a press conference in New York last May. According to sources, Spotify invested 500m SEK, or $56 million. Their video plans were in beta before quietly launching earlier this year.
According to Breakit’s data, Spotify video traffic is almost non-existent. A source from the company told the Swedish site,
“It started at very low levels and has never lifted.”
Another source said,
“We had suspected this was coming…One cannot directly say that they broke into the video market.”
This news isn’t very surprising. The Swedish company pushed out their video plans, and most users may not even know such a service exists. In fact, TechCrunch called their first videos “boring behind-the-music cartoons.” This may be the reason why the company’s video traffic may be “non-existent.” So is Spotify finally dismissing their video plans, despite the amount of money they’ve spent on their former partnerships?
Not so. Spotify was quick to dispel the news that they might exit the video arena. A Spotify spokesperson reached out to Breakit in an attempt to put an end to the rumors. They said,
“We’re one hundred percent committed to video and podcast content and exploring new and fresh ideas for our audience, and we have lots of great original content available now or coming soon, such as our Landmark Metallica documentary.”
Ending their partnerships with both ESPN and Vice Media is merely part of the process. As a football team occasionally changes their roster of players after a season, so then Spotify must do the same.
“We work with many different non-music content partners to develop and deliver content, and that roster of partners naturally changes from time to time.”
MBW believes that by ending their partnerships, the Swedish company is actually preparing to go down the Netflix route by creating the bulk of its own banner programming. This is a risky and very expensive strategy, but one that may pay off for the programming if Spotify’s programming proves popular. Breakit believes this to be a major misstep for the company, with a very costly consequence looming for Spotify.