This could be huge: music streaming service Spotify is reportedly planning to add video to its content lineup, and even invest in original content in the same way that major video streaming services like Netflix have started doing.
Reports on Business Insider quote two unnamed sources “briefed on the company’s plans” as saying that Spotify intends to become an on-demand music and video service, and is looking for partners that can help it fund and create exclusive content.
The London-based company has already amassed a huge following, with 20mn users across 24 countries in which it operates (the major European markets plus the US and Australasia).
However, only 5mn of these are paying customers, and the company appears to be running into the same problem encountered by Netflix a year ago – namely that while the studios are willing to provide their content for the service, they take a huge cut in return.
Hence the need to invest in original content in order to improve profit margins and attract new customers – Netflix’s big-budget Kevin Spacey drama ‘House of Cards’ has already received favourable reviews, and after closing massive rounds of funding in the past 18 months, Spotify appears to have the credit worthiness needed to pursue a similar route.
Speaking to IP&TV News at the TV Connect 2013 event in London last week, Pascal De Mul, Global Head of Platform Partnerships at Spotify, told us that he is aiming for the service to be on the majority of TVs by the end of 2013 – full video here.