Music Streaming Vendor Spotify May Move Into Online Video

By Todd R. Weiss  |  Posted 2015-05-08 Print this article Print
Spotify, streaming music, streaming video, YouTube, Facebook

Spotify would be taking on Web video powerhouses like Facebook, Google's YouTube and others in a move aimed at growing the company, according to a report.

Online music streaming company Spotify AB is reportedly looking to expand its business into online video as it works to grow in size around the world.

To make it happen, Spotify is reportedly seeking a partner to help make the move, according to a May 8 article by The Wall Street Journal. The article said the pending plans were revealed by unnamed people who are familiar with the matter and that the company is contemplating a strategy that could put growth ahead of profit.

Spotify "has been in talks with several digital-media companies about potential partnerships," the sources told the paper. "Spotify has approached so-called multichannel networks that specialize in creating and distributing video for YouTube to discuss both acquiring their material and co-creating original video series, the people said. It also contacted some well-known traditional-media companies about potential alliances."

The companies that have so far been involved in such talks include Time Inc., Tastemade, Maker Studios and Fullscreen, according to the report.

Spotify could announce its video plans as early as this month, the sources told the paper. The company is set to hold a media event on May 20 in New York, but it has not yet announced the purpose of the event.

A move into online video would pit Spotify against some major players in the online video marketplace, including Google's YouTube unit and Facebook.

Spotify offers free streaming music accounts with fewer features for users who are willing to listen to periodic ads. The service also offers premium subscriptions without ads for a monthly fee of $9.99. The premium subscriptions also present the streaming music in HD quality, which is an upgrade from the free services.

In February, Spotify launched a desktop update to give users new features and improvements, including easier music browsing and sharing with friends.

In November 2014, the company announced that it had so far paid more than $2 billion to record labels, publishers and collecting societies for the use of the music on the service since it was begun in 2008.

Spotify isn't the only streaming music service making news lately. Apple's Beats Music service is under the microscope of U.S. antitrust officials, who are looking into the company's practices in forming partnerships with music content companies that will provide the content received by customers. At the same time, Apple is apparently having trouble securing those deals with music content companies just months before a planned June launch of the service, according to an earlier eWEEK report.

The antitrust probe into Apple by officials from the Federal Trade Commission cited unnamed sources who are familiar with the investigation into how Apple is making deals for content.

An earlier eWEEK report back in March said that Apple appeared to be planning the launch of the new Beats Music service plans at the WWDC event.

The Beats Music service is expected to be launched as part of an upgrade to a future iOS app and will also be offered through a stand-alone Android app, which would be the first such app built internally by Apple, according to the analyst firm Seeking Alpha.

Beats Music's streaming service will reportedly be priced at $7.99 a month, which is less than several competing streaming services, including Spotify and others, according to reports.

Apple bought Beats Electronics in May 2014, which included Beats Music as well as the company's headphone business, after rumors had been circulating about the transaction for almost a month, according to an earlier eWEEK report. The purchase was made with $2.6 billion in cash and $400 million in Apple stock. Beats Electronics, founded by rapper Dr. Dre and pop music producer Jimmy Iovine, makes high-end headphones and also operates Beats Music, the popular streaming radio service.

In September 2014, Apple denied widely circulating rumors that the company was planning to shut down Beats Music just four months after it bought the company for $3 billion, according to an earlier eWEEK story. While Apple flatly denied the shutdown rumors at the time, a company spokesman refused to give details about what might lay in store for the streaming music division. The denial of rumors was in itself interesting and unusual because Apple, like other companies, usually remains stoic about reports and rumors it doesn't want to discuss publicly.

Beats launched Beats Music, a $9.99-a-month streaming music service for iOS, Android and Windows Phone devices, in January 2014, according to a previous eWEEK report.



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