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Does Spotify want to be the next YouTube?
That might be a tall order for the music streaming service, but there’s little doubt the Sweden-headquartered company wants video to be a larger part of its platform, and so far, its efforts have been proving successful.
As of last count, more than 170 million users have streamed a video on Spotify, up from 10 million in 2019, and the number of monthly active users who engage with video podcasts has jumped 60% year on year.
Supply is growing along with demand. The number of video creators on the platform has jumped 50% in the past year, and there are now more than 300,000 video podcast shows on Spotify.
That’s all translating into greater engagement on the platform. The average time spent by users on Spotify has grown from around 30 hours per month in 2020 to nearly 40 hours today.
Now, Spotify has unveiled a series of new features to increase engagement with video, and entice video creators to its platform.
At its Now Playing event in Los Angeles on Wednesday (November 13), the company unveiled its new Spotify Partner Program that offers video and audio creators multiple revenue streams to monetize their content.
Creators can earn every time an ad monetized by Spotify plays in an episode, both on and off the platform.
“All a creator has to do is tell us where they want the ads to play, and we’ll take care of the rest,” Spotify wrote in a blog post.
Creators can also earn revenue from Premium subscribers through the new program. Premium subscribers who stream video won’t be served dynamic ads, but the content creator will be paid “based on how much their fans stream their content,” Spotify said.
MBW understands that this new payout model won’t affect music royalty payouts. Although different content types are accessible through a single subscription, they all have their own business models and separate revenue streams.
Spotify evidently also believes the new push to expand video content will benefit music rights holders, as it’s expected to bring in new paying subscribers who will also listen to music.
Notably, the new Partner Program will be available to both audio and video creators – because Spotify sees less and less differentiation between the two in the emerging “multiformat” media world.
“We see some shows that are primarily an audio show dipping their toes into video with special episodes,” monetization expert Matt Huang said at the Now Playing event. “This program is going to help them monetize all of those different types of content as they’re experimenting and figuring out what works for them.”
The Partner Program is now available to eligible creators in the US, UK, Canada, and Australia.
Spotify is also jumping into the short-form video arena, enabling video creators to upload the short videos they created for TikTok, YouTube Shorts, and other short video platforms. The clip feature is available for the time being in a handful of markets, including the US, UK, Canada, Australia, New Zealand, and Singapore.
But Spotify is clear that the “goal is not to make our platform yet another place to watch short-form content. We want to help people find their next favorite shows where they are ready to immediately listen or watch, ultimately driving more streams of full-length episodes.”
“Our goal is not to make our platform yet another place to watch short-form content. We want to help people find their next favorite shows where they are ready to immediately listen or watch, ultimately driving more streams of full-length episodes.”
Spotify
Creators will also now be able to upload video thumbnails, either a Spotify-generated one or one they created themselves.
Additionally, Spotify has redesigned its analytics dashboard to make it easier to access key metrics such as changes in the number of followers, number of streams and streaming hours for recent episodes, and the share of people exposed to a creator’s content who were converted to listeners/viewers.
Spotify is also enhancing the video experience on the audience side, adding personalized video recommendations throughout the app, making improvements to playback such as video chapters and pinch-to-zoom, enabling comments, and adding a following filter to make it easier for users to find their favorite creators.
The new video features were unveiled the same week Spotify reported its Q3 earnings, which showed the number of paying Premium subscribers rose to 252 million, up 12% YoY, and up by 6 million from the previous quarter.
The company is on track to report its first-ever full year of profitability. With a Q3 operating income of EUR €454 million (USD $499 million), Spotify is now forecasting full-year operating profit of €1.37 billion (approx. $1.50 billion) for 2024.Music Business Worldwide