Netflix, Apple, Amazon, Facebook, YouTube – all these companies are in a big battle – for new and original content. The largest player in the music market, Spotify could not possibly have missed out on this new trend.
With more than 60 million paying subscribers for the music service, Spotify has commissioned non-music content to increase the amount of time users spend with the app. Non-music programming also benefits the company by reducing the share of sales it must hand over to music rights holders.
Last year, Spotify announced the launch of 12 original shows, including a “Carpool Karaoke” type show called “Traffic Jams” produced by Russell Simmons’ All Def Digital. However, none of these shows garnered much attention and viewership from Spotify’s users.
As a result, Spotify’s head of content partnerships Tom Calderone is leaving the company. The former VH1 boss joined Spotify in March 2016, and commissioned a series of shows for the company’s nascent video offering.
Bloomberg suggests that with his departure, Spotify is “narrowing its video ambitions… the company is making clearer that it wants videos on the service to stay closer to the music industry.”
A Spotify spokesperson confirmed Calderone’s departure, explaining that he had been transitioning out of the role for the past month. “We are focusing our expanding video offerings on RapCaviar, Rock This and other popular Spotify owned and operated playlists. Building out our video and podcast content remains a priority for Spotify and we will have more information to share on our future plans soon,” the spokesperson said.
Spotify’s decision to refocus its video production around popular music playlists is pretty similar to YouTube’s early entry and subsequent breakthrough into original content. Back in 2012, YouTube spent $100 million on getting outside media partners to produce content for the platform, only to find out that YouTube viewers heavily gravitated to videos produced by people already active on the platform.
Spotify plans to go public later this year or in early 2018, and just reached a new long-term deal with Warner Music Group, the third-largest record label. Without original content in place, Spotify may not be able to manage, retain, or grow its user base, and thus increase its valuation for the IPO.