Spotify, like all friendly streaming music giants, needs to make money. While the popular streaming service does make revenue through subscriptions, the cost of paying for all those music licenses is high. So what’s a company that needs to make a good deal of money to do? While Spotify can’t increase user fees, the company can entice big brands by appealing to marketing teams.
Spotify has recently announced that brands will be able to build song lists for users to download. This, in turn, will generate advertising dollars, Spotify hopes. While allowing brands to create song lists might be good for Spotify, I shudder to think what this will mean for music, and, more importantly, for those who blindly download music lists.
What’s That You’re Playing?
“Why, it’s my McDonald’s playlist!” This scenario could likely become a reality very soon. Spotify already has a number of brands lined up to create playlists. If you are a Spotify subscriber, you will see lists from brands such as Intel, AT&T, McDonald’s and Reebok. Each company will likely come up with a different type of playlist based on that company’s targeted market. For example, Reebok will be creating workout playlists that users can download and workout to – no more searching for songs!
It’s hard to say what McDonald’s will do with their Spotify branding opportunity (music to eat to?), but AdWeek tells us that Intel plans on recommending songlists based on what your Facebook friends listen to and AT&T will create songlists based on the locations where songs were originally recorded (a map will be included that users can click on). This is a whole new advertising angle for brands of all sizes, though Spotify is starting with just a few brands for the time being.
Spotify allowed some companies within the music genre to create playlists last year. These companies included Billboard, Rolling Stone, and Pitchfork. But it makes sense for music companies to create music lists. Does it make the same sense for brands to create lists? There’s a bigger threat here too. Brands may soon dictate what the world listens to. If a small time artist happens to be picked up by a big brand, that would be excellent, though the chances of this happening are slim. Instead, big brands are far more likely to pump out music that they have been paid to include in a list. So far, this assumption is just speculative, but it’s a tad frightening all the same.
Spotify wont’ be charging brands to use this new service, though the company is hoping that ad revenue will be generated in much the same way that social networks current gain income. Brands will pay for advertising throughout the Spotify site if they deem spending those dollars on Spotify worthy. The result of this type of advertising is more money for Spotify to purchase music licenses with. If you use Spotify, let me know how those brand lists are looking and whether or not you dig this idea.