Spotify may be getting into the online video game, but seemingly not with a Vevo-style (or, more accurately, Tidal-style) emphasis on music videos. According to the Wall Street Journal, the streaming music service is thinking more along YouTube lines.
Its story claims that Spotify “has been reaching out to companies that specialise in making content for YouTube to discuss both acquiring their material and co-creating original video series” as well as tapping traditional media companies.
The WSJ suggests that a press event on 20 May in New York could herald the announcement of the planned video service, which “likely would be available to subscribers and non-subscribers alike, and could eventually include advertising”. This afternoon, Spotify sent out invites to the event to journalists.
There are certainly deals to be done: multi-channel networks (MCNs) like Maker Studios, Fullscreen and AwesomenessTV are running networks of channels with millions of subscribers and billions of monthly views on YouTube – but they’re all keen to find new channels outside YouTube too, to reduce their reliance on that service.
Firms like BuzzFeed and Vice Media are also keen for new distribution channels for their content, and could be good partners for Spotify.
It will not be alone in trying to court them though. Startup Vessel launched earlier this year as a subscription service promising up to 72 hours exclusivity on new videos from a swathe of YouTube creators, while Snapchat, Facebook, Yahoo, Vimeo and Dailymotion are among the other companies keen to work with these new digital stars.
Update: the New York Times has fleshed out the rumours, and it does seem like Snapchat is possibly the model here.
“The company has recently had discussions with an array of media companies, including major television networks, online video producers and magazine publishers, to bring short video clips to Spotify as soon as this month,” it claims.
Its report says NBCUniversal, Fox, Viacom, Vice and Condé Nast are among the companies approached by Spotify.
“Spotify has offered some of these partners millions of dollars in guarantees, along with the potential for more shared revenue, to provide short clips like late-night television comedy skits that can be watched in all-you-can eat form and arranged into playlists.”
Getting into video would certainly add another string to Spotify’s bow as it prepares for fierce, well-funded competition in the streaming music space from Apple and Google/YouTube.
A move into video could also be lucrative for Spotify’s advertising business on its free tier. Digital video advertising revenues are expected to grow sharply in the coming years, and on mobile devices in particular – right now, many of these videos are advertising mobile games like Clash of Clans, for example.
Right now, video ads in Spotify’s mobile app don’t make that much sense, because it’s used to listen, not watch. Adding video content, however…
And if Spotify is able to make more money from its free users through advertising, that could be a factor in its ability to convince major labels to continue supporting its freemium business model – although the argument against this is that those new ad revenues would surely be shared with the video partners rather than labels.
Also, video might be useful in Spotify’s expansion to one particular new screen: the television. Its recent deal with Sony to put a Spotify app on PlayStation consoles, for example, as well as other partnerships with set-top box and connected TV makers. Music artwork and streaming tunes on these bigger screens is fine, but video would be a welcome addition.
That said, getting into video – even if it’s YouTube-style content rather than buying up TV shows and films, Netflix-style – will also bring a new source of costs, especially if Spotify is planning to invest in original shows from its new partners.
There is also the risk of blurring the company’s focus at a time when it needs to be sharper than ever on the music side. Spotify’s press event promises to be a very interesting hint at what Spotify becomes next.
One final thought, courtesy of digital music veteran Jason Herskowitz on Twitter:
YouTube needs to come up with a compelling video-less background music experience. Spotify needs to do the opposite?
— J Herskowitz (@jherskowitz) May 7, 2015
It’s funny how things turn out, eh? Roll on 20 May.