Why Spotify Is Getting Into Video

This week looks set to herald the launch of video content on Spotify’s Android app with a video enabling update coming to the service’s iOS app coming later. Initially the video viewing functionality will be available to Spotify users in the U.S, the U.K, Germany and Sweden where less than 10% of customers have already had beta access to the video functionality and have helped drive the overall look and feel of the new feature. Video integration has been under development ever since the world’s largest music streaming service announced that it as moving into video in May 2015.

Since then it has acquired a host of content partners who are being paid to deliver relevant and premium content to Spotify customers. These range from Comedy Central, the BBC, right through to the Native Content Creators of Maker Studios. So whilst a music focus can clearly be expected from this new content it is restricted to music themed video. And crucially it will not be (at least initially) monetized with Spotify’s vice president of product, Shiva Rajaraman stating to the Wall Street Journal that “this is primarily a demand play.”

Why A Music Streaming Service Feels The Need For Video Content

Spotify, despite having 75 million users and 20 million paying subscribers faces disruption. Audio alone is increasingly no longer enough for today’s digital consumer, and as we pointed out in our 2016 Predictions “Video Eats The World” report, video content is now at the forefront of all digital media interaction. Nowhere is this more so than for music. With 44% of consumers now watching music video compared to 37% who stream audio for free, music video is digital music’s killer app.

How the music industry as a whole responds to this pivot in consumer behaviour is one thing. How Spotify reacts is straightforward –they get into video. And this is where Spotify’s self-selecting user base should work to the service’s advantage- Spotify already knows what they want. In some respects Spotify can be viewed as a data company firstly, and only secondly as a music service. Data-driven content already account for much of what the end user sees from listening recommendations to early bird discounts to gigs. Adding video to this mix aligns Spotify with direction of travel of consumer behaviour and represents a lucrative marketing channel for advertisers.

Video Content Is No Longer An Optional Extra

In a smartphone world with data limits being constantly expanded, video has become the default means of reaching a new audience. Although frequently presented as a lean-in experience of the consumer, in reality many now find watching video less demanding than reading copy on a web page- for those raised on the internet-video is a lean back experience.

But Spotify’s big challenge will be whether it can convince its users to consider it as a video destination as well as a music service. The risk is that video ends up as some poorly frequented backwater. But transitions are possible. Just look at Facebook and Snapchat – in a couple of years they have come from nowhere to become the second and third biggest short form video platforms. And while they clearly have assets Spotify does not, Spotify’s approach is much more akin to become a Netflix than it is a YouTube. If Spotify pulls this off it could well change the face of the streaming business, music and video.

MIDiA Research