Spotify Just Parked Its Tanks On YouTube’s Lawn

Today’s Spotify announcement was always going to be about Daniel Ek attempting to regain control of the streaming narrative in advance of Apple’s grand entry in a couple of weeks.  But if you were expecting this to be the launch of a bunch of new music features then you were in for a little bit of a shock.  Though there were some new music features outlined (such as swipe to listen, behaviour-learning programming and fitness features) the core of this event was positioning Spotify’s transition from a pure play music service into an entertainment destination with video taking centre stage.  YouTube has been competing (on uneven terms) with Spotify for years as a music service.  Now Spotify is fighting back by going after YouTube’s heartland.

Moving Beyond The Soundtrack

Spotify’s hook line for the event was ‘Soundtracking Your Day’ but in actual fact Spotify want to do much more than that (after all that’s what they already do), now they want to also be a visual part of your day too.  Spotify announced a host of new video partners including native online video producers, next gen video creators like Vice News and traditional brands like Comedy Central.  Spotify is creating a catalogue of video shorts that are designed to fit into your day.  This is unashamedly YouTube, Vessel and Buzz Feed territory.

Lessening The Music Dependence

While music consumption is booming (25 billion hours of music has been streamed on Spotify so far) Ek and co are spreading their bets.  The last 6 months have been tough for Spotify with the major labels casting doubt on its freemium model due to thinly veiled pressure from Apple.  Spotify will quite rightly feel aggrieved with this shift in attitude considering the fact it now accounts for half of global streaming revenue and is doing a better job of driving subscription uptake than anyone has ever come close to doing.  Running a music service can be a high effort, low reward and frustrating experience at times.  So Spotify can be forgiven for wanting to weaken its utter dependence on the whims of a few big labels.

Reversing Into YouTube Territory

Reversing into YouTube and Buzz Feed’s front lawns though will be easier said than done though.  The nature of the mobile consumption landscape is a diverse mix of content capsules, whether they be apps, mobile bookmarks or notification feeds.  Users have learned to consume mobile content in bite-sized chunks.  Facebook has done what it can to re-aggregate content via timeline but has found that asset more useful for sorting users personal content and shared content snippets.  Messaging platforms are now looking like the place where content audiences are best aggregated.  In fact the history of content audience aggregation can be summarised as:

1 – websites

2 – portals (e.g. Yahoo, AOL)

3 – social networks

4 – messaging platforms

Which is why Facebook is disrupting itself with WhatsApp and Facebook Messenger, it knows where things are heading.  This is the environment in which Spotify will be competing, with Snapchat and Line as much as it is with YouTube and Vice.  In Spotify’s favour is the fact that many of the digital first content destinations, Buzz Feed especially, are entirely willing to envisage a future in which their content could exist entirely on third party platforms.

Return Of The Portal?

In a lot of ways Spotify’s video mini-pivot feels like a back-to-the-future spin on the 20th century portal model but there is clearly an opportunity to re-aggregate our fragmented digital entertainment lives.  Whether Spotify can do that or not is another question and even if it can, it will be a long-term play rather than some short term hit.  Ek might have said he wants to ‘soundtrack our day’ but his product strategy actions show us that he feels Spotify has outgrown being the soundtrack alone.

8 thoughts on “Spotify Just Parked Its Tanks On YouTube’s Lawn

  1. Hi Mark,

    So sorry I missed you in Nashville last week. I was hoping you’d stick around the Who Knew event, but alas, by the time I got off stage you had gone.

    Are you going to MIDEM by any chance? If so, it would be great to catch up with you there.

    BTW, we met many, many years ago at a Jupiter conference in Barcelona. I used to be a Jupiter client (at N2K and then with Deja.com), so I knew a lot of the analysts at that time. In fact, that conference in Barcelona was one of my favorite events in the music business!

    Thanks for your good work. I’m planning on checking out your new book on my way to MIDEM in two weeks.

    Best regards,

    Debbie

  2. Ugh…

    The new Spotify = The new MySpace?

    Remember when MySpace was getting their milkshake eaten by Facebook and they rebranded under Mike Jones’ entertainment portal concept? (http://m2.facebook.com/notes/vpe-public-relations/meet-the-new-myspace/10150093051201041/). It was the same thing: “we’ll build a portal that you can get auto-curated entertainment content based around your preferences…”

    Now, to be fair: execution is everything – and maybe Spotfy can figure out how to make a portal work despite almost EVERY.MAJOR.PLAYER trying to do that at some point (google, yahoo, aol, myspace, microsoft).

    There’s a reason why portals fail: they don’t solve a real need in the marketplace. Oh, they always sound great on paper: a jumping off place to the broader internet. But what ends up happening is the user finds the auto-curated content to be sub-par to trusted third party sources. The pain point of actually going to those third party sources isn’t that great – it’s opening an app or hitting a bookmark.

    I don’t know: I don’t see a real need for yet another entertainment platform. I think they should have doubled-down on their music offering instead of diluting it.

    But what do I know?

  3. Hi Mark

    Interesting comment on the Portal model, as Beatport are already well down that road and judging my their announcements look to be investing heavily to be the dance music lifestyle portal, with even paid subscription coming.

    Speak later.

    Q

    >

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