That’s right— Spotify is no longer limited to audio! Starting solidly with Ford, McDonald’s, Coca-Cola, Target, Wells Fargo and NBC Universal Pictures as its first takers, Spotify has begun hosting video advertising campaigns on both its desktop and mobile versions. In order to accommodate the multitude of users that stream music freely, Spotify has branched out from its solely audial and static visual forms of advertisements and extended into what it is calling “Sponsored Sessions.” Click here to watch a video ad on…video ads.
“Sponsored Sessions” is a name for the exchange of 30 minutes of free commercial-less play for the viewing of one brand video. By testing out different time slots ranging from 15 minutes long to an hour long, Spotify was able decide on the sweet spot of 30 minutes. These sessions exist on mobile devices, tablets, and desktops. However, by holding a subscription for Spotify Premium ($9.99, but $4.99 for students), one can avoid advertisements entirely.
From the point of view of a Spotify user, this digital advertising plan seems like a win-win-win for Spotify, Spotify users, and brands. Spotify is being compensated for the block of free listening it is giving its customers. In addition, the Sponsored Sessions might inspire users to join Spotify Premium as the scale of advertisements increases on the site. Spotify users, with the start of Sponsored Sessions, will be interrupted less and experience an increase of free streaming without ads. The brands benefitted by the Sponsored Sessions will be able to access a large and growing market of all ages and backgrounds. Brands will also be able to associate themselves with a company that maintains a good reputation.
Launched in Stockholm, Sweden in 2008, Spotify is a music streaming service, accessible from computers, mobile devices, tablets, and home entertainment systems. Spotify began with offering paid subscriptions to everyone, but restricting the number of free accounts. Immediately after, the company simultaneously suffered massive losses, and announced the establishment of many licensing deals with record labels. By September 2011, the company had two million paying subscribers in Europe, and decided it was time to launch in America. Approximately a year later, Spotify recorded that 4 million people were subscribers. Over the course of two years, Spotify created and managed its own app, which now allows Premium users to access its repertoire of music freely from their phones, and lets anyone with the app access and shuffle their pre-made playlists.
Spotify has grown quickly in the past and will continue to grow. They offer smart solutions that appeal to every stakeholder. Do you think this is a good move for Spotify? Will it affect the number of users that switch to Premium?