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This is Lowpass by Janko Roettgers, a newsletter on the ever-evolving intersection of tech and entertainment, syndicated just for The Verge subscribers once a week.
Get ready for a lot more video content on Spotify. Sometime later this month, the service will start incorporating music videos into its app, and give US-based subscribers the ability to easily switch back and forth between audio and video versions of many popular songs.
And Spotify isn’t stopping there. “We’re not just building features; we’re creating a best-in-class video experience to rival the biggest players, like YouTube or TikTok,” the company declared in a recent job listing. Spotify is evolving “from an audio-first platform to also become a world-class video service,” that job listing states.
Spotify’s expansion into music videos comes after the company struck licensing agreements with the major labels and the National Music Publishers’ Association this fall that specifically included provisions for audiovisual rights.
“These deals secure broader video rights that we’ve long needed,” explained Spotify’s chief business officer, Alex Norström, on the company’s most recent earnings call last month. “This was a critical strategic objective for us because it unlocks our ability to innovate and launch more products and features.”
Spotify has also been busy adding other forms of video content, with Norström revealing during the same earnings call that it now has close to half a million video podcasts and shows on its platform. More than 390 million users have streamed video podcasts on Spotify, and time spent watching videos has more than doubled year over year, according to Norström.
MIDiA Research managing director Mark Mulligan believes Spotify’s embrace of video is a sign of the times for the online music business, which is starting to hit a ceiling in Western markets. “Music streaming is entering an optimization phase,” Mulligan says. “The last 10 years were about growth; the next 10 will be defined by consolidation.”
With most consumers who are willing to pay for music already subscribed to a streaming service, Spotify’s focus has to shift to growing its share of audience time, to retaining paying subscribers, and to better monetizing those on its ad-supported tier. That means the service isn’t just competing with Apple Music and other music streaming services anymore, but with anything else occupying our eyes and ears, whether that is TikTok, Netflix, or even video games.
Spotify is also at a disadvantage because music tends to be a background medium for many people, argues Mulligan. “Adding video helps Spotify increase attention,” he says. “Of all entertainment formats, music is the one consumers are least likely to be paying attention to — just under a third are focused on the music they are listening to when streaming. Adding video commands more of the senses and therefore attention.”
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