Spotify Fires Back at YouTube, Adds Own Video Content

Spotify Fires Back at YouTube, Adds Own Video Content

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Normally, I listen to my music on Spotify when I’m on the run (and by run I mean sit in my car) and pull up YouTube if I’m at my home office. Last November YouTube launched its streaming music service, Music Key in hopes of influencing behavior like mine, and while the service is still in beta, it is believed that YouTube rolled-out the feature as a direct competitor to other music streaming services like Pandora and Spotify.

But just this week, Spotify fired back by announcing that they are planning to introduce video content as well. This is a particularly interesting move by Spotify who has over 60 million active users, 15 million of which are paying subscribers.

Spotify Video: Short-form & Original Content

Now before you start thinking Spotify will be a major competitor to YouTube, think again. The video that is being added to Spotify is likely to be short form clips that will help enhance the entertainment on the site and help users “find more of what they love”. There is also some original content coming up from a whole host of content creators including Maker Studios, Comedy Central, Nerdist, Fullscreen and Tastemade. Spotify is pulling in groups that have a proven track record in both new and traditional media. The original content will be paired up with news and entertainment clips to bring users, “a deeper, richer, more immersive Spotify experience” according to Deniel Ek, Founder and CEO at the company

Music is really where it all began for video, so it’s only fitting that now video comes back around and pairs up with music. The kind of views that music videos get on the site are helping attract users to YouTube’s Music Key service, making it increasingly difficult for one-dimensional streaming services to compete. In the last five days alone, the ‘Bad Blood’ video from Taylor Swift has generated (along with an incredible amount of hype) over 45 million views, and 1.7 Million engagements since its upload on May 17th:

Will Video Content Save Spotify?

It has been reported that Spotify is struggling to turn a major profit, due in part to money paid out to music rights holders. Making this move into the video space will help Spotify diversify their position that is currently relying heavily on the ads being played to the free users (over 45 million). This offering should slowly turn Spotify more into a media company instead of just a music streaming service. It makes me wonder if Spotify is regretting the decision not to sell to Google last year when their path looks very much aligned with video going forward. As evident by Music Key, YouTube has been making great efforts in the past few years to bring in any sort of subscription model that viewers will pay for, which suggests that an ad-supported (free) business model has challenges that both groups may be unwilling to accept.

So what does this all mean for content creators and marketers? It’s unlikely that Spotify will have the same impact on the streaming video business that they have had so far streaming music. At the very least the move should help solidify their position as a market leader in streaming music and help them fend off newcomers like Tidal and Apple’s soon to launch product Beats Music. But it illustrates an important lesson about streaming music and business in general. Don’t put all of your efforts behind only one product. Try new things to diversify your stance and allow yourself to have an opportunity for success.


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