I am going to start this by saying that I love Spotify. I have consistently been using it as my primary source of music discovery since 2015. While I have dabbled in other services such as Google Play Music, Apple Music, YouTube Music, and Deezer I always come back to Spotify. Over the last half-decade, Spotify has changed a lot. What was once a very excellent music player and music player only, is now transforming into an all-encompassing multimedia platform. Here is why the company is making these moves and why they might succeed.
Not Just Music Anymore
Spotify has long been considered the top streaming music platform available today. The apps curated playlists and recommendation engines have long been viewed as the best in the industry. So why make the effort to try and diversify? The answer is quite simple: Apple Music. Ever since Apple unveiled its streaming music solution, it has gained more users and has surpassed Spotify in paid subscribers. Spotify had to do something different.
Throughout the past few years, Spotify has been making moves to veer away from the idea that it is just a music app. In late 2015, the company added support for podcasts on its platform. The company has seen an increase in the usage of podcasts through its various apps and websites, which has led to an increase in music listening on the app.
In recent months, the company has acquired the sports podcast network The Ringer for $196M and has started to experiment with video podcasting content using two YouTube stars. These two moves show that the company is very serious about being more than just a simple music streaming service. After all, Apple Music gladly fills that void. Google’s YouTube Music has its hooks into the search giants YouTube cash cow, and Tidal has focused its efforts on being pro-artist and delivering high fidelity music above all else.
Spotify has decided to be the multimedia app that does music very well. The company is positioning itself to be viewed as a hub for music, podcasts, and video content moving forward. It is already successful in the first two categories, but the real key will be as an attractive hub for video content creators in the future.
The Alternative to the Algorithm
If you were to talk to smaller YouTube content creators, particularly in the technology space, they would tell you that YouTube will always prioritize a bigger channel in recommendations to smaller channels regardless of content. This is due to the YouTube algorithm that prioritizes videos with more views since videos with more views generate more ad revenue for the company (Here is a good look at how the YouTube algorithm has changed over the years).
This is a definite issue for YouTube content creators, especially those that are looking to make YouTube their full-time job. But many of these people stay on YouTube because there isn’t much competition for them to deliver their content. Technically, Vimeo is still an option but that service doesn’t resonate with the same impact as YouTube does. Perhaps this is an opening for Spotify to provide an alternative.
The popularity of Tik Tok as a platform has shown that there is an appetite for video content that is increasing by the hour. If Tik Tok has been this successful in the way of short-form videos, then there is potential for Spotify to be successful in longer format videos. This move gives content creators an option to go the traditional YouTube route, give Spotify a try, or even dabble in both services.
Smaller YouTube channels will often lament the lack of monetization is the current state of YouTube, this would provide a different path. Competition is always healthy for the industry, and the opening of more options can be nothing but good for content creators. Spotify is entering the video arena at the right time.
The Podcast Gateway Drug
These days, it seems like everyone has a podcast of some sort that they are working on. People will meet up at a bar and have a conversation and throw the drunken idea that they should make a podcast together. Talking about making a podcast is the modern version of two drunk people suggesting that they should open a bar together. Interest and the listening of podcasts have done nothing but increase over the years, it only makes sense that Spotify make this one of their pillars of expansion.
The idea of using Spotify as a publishing platform makes sense from a usage standpoint. If a user is using Spotify for podcasts and they have a free account they will be exposed to Spotify’s music catalog. This encourages listening to music that is ad-supported and increases the potential to upgrade to a Premium membership which is a revenue metric for the company. Podcasts themselves will often have ads in them, also generating more ad revenue for the company.
The idea of having podcasts and eventually video in concert with music is to make Spotify a multimedia hub. A place where all the content from the people you follow can be easily accessed. And this is what makes it appealing compared to Apple Music and YouTube Music. Consider this as an example. You listen to a true-crime podcast regularly. By Spotify having support for both this podcast and music, the podcast can easily like a Spotify curated music playlist related to the podcast. This level of integration can enhance the listening experience for all of those that want a deeper experience. This is the genius of Spotify’s play to be a multimedia hub.
The Creation of a Platform
The blueprint to make Spotify to more than just a music app has long been underway, but now we are seeing the fruits of the companies labor. From a certain perspective, something is refreshing about Spotify doing this. Spotify is an independent company with many partnerships but has not been bought out by the bigger tech companies in the industry. There is a satisfying feeling to know that the app is not caught up in an ecosystem from Apple, Google, or Amazon.
Spotify sees itself now as a platform for creation, in addition to the library where your favorite music is found. The companies efforts are working. When podcasts promote their show, they will often mention Spotify and Apple Podcasts as the main places to consume their content despite there being tens of other podcast apps out there. More recently, ESPN aired the Last Dance documentary series centered around the 1998 Chicago Bulls team. This documentary had an official playlist. Where was this official playlist to be found? On Spotify.
The inclusion of podcasts for the example of the Last Dance is what validates what the company’s direction is currently. Consider the sports fan currently, who was watching this documentary and sought out some commentary from their favorite sports podcast after the episode aired. Spotify’s intelligent recommendation can then suggest the official playlist from this documentary, which gets the user to get the full experience. This is where it all works as one. And this strategy will work for Spotify moving forward.
It is important now that we look at Spotify from a different viewpoint. They are no longer merely a competitor to Apple Music. They compete with Apple Music and YouTubve Music. They also compete with Stitcher, Apple Podcasts, and iHeart Radio for podcast listeners. And perhaps sooner rather than later the company will also be competing with YouTube. This is no longer just a music app, it is a multimedia platform (and one to be reckoned with at that). For the sake of competition and content, I hope that Spotify is successful in this new vision and they are off to a great start.