Why Spotify Needs To Invest In Visual Along With Audio

With the announcement of a billion dollar raise Tuesday, Spotify dominated the music tech news cycle -- but if the rest of the week’s news is any indication, that position might be short-lived.

The past few days have also seen an executive turnover at Pandora (which recently purchased streaming service Rdio), the launch of Soundcloud’s official paid streaming service Go, new user numbers from Tidal, and the release of new features from Australian streaming service Guvera.

The streaming music space is increasingly crowded, and unfortunately for most of the services, differentiating their offerings is difficult. Everyone now has more or less the same catalog, and there are only so many different playlists one can post.

Additionally, there are only a limited handful of artists who can provide services with exclusives that will draw any sort of interest, and even those don’t always work as planned.



Tidal might have seen a spike in members because due to its release of Kanye West’s new album, but will any of those users stick around and prefer Tidal over Spotify, YouTube, or Pandora long term?

Streaming services have essentially reached the end of what they can do with audio alone. The next logical step for them to take is video, which provides a far stickier user experience and has been shown to have a higher perceived value among consumers.

Tidal and Apple Music have both announced the development of original programming, and Spotify quietly launched video offerings earlier this year. But those video offerings have been underwhelming -- videos are only available on mobile, and are just clips of content available any number of other places.

Users can watch segments of the Daily Show or the Tonight Show in your Spotify app, but it’s not clear why anyone would.

If Spotify wants to win the streaming battle, it needs to double down on video and invest in sharing and creating great content. There are three different paths the company could take. The easiest and most obvious would be to build a library of great music video content -- every time a user wanted to hear a song, they would be served the official video along with the audio.

Spotify could also license concert videos and even venture into live streaming shows. It’s not a new strategy -- Tidal attempted to live-stream Kanye West’s album release party, although it was plagued by technical difficulties, but at least it is on brand and would add some value to the user experience.

A more interesting move would be to launch a suite of original programming, although Apple Music and Tidal are also in this space -- Tidal is offering a hip-hop drama and a stand-up comedy show hosted by DJ Cipha Sounds, while Apple Music has only said it is partnering with to create an unscripted series.

But figuring out what type of original programming users would respond to is tricky. Spotify would need to remain on brand while not being too obvious. A spate of reality shows about artists probably wouldn’t do the trick, but something that is wholly disconnected from music might feel unnatural.

Despite the challenges, Spotify should make some moves in the space; if Netflix’s engagement numbers are any indication, they could see much higher engagement, and users would see more value.

Finally, Spotify could leapfrog everyone else and start developing VR content. With the release of the Oculus Rift and pretty much everyone in tech predicting the rise of VR, it makes sense to get ahead of the curve and release immersive audio and visual experiences.

By the end of 2016, simply listening to music might feel antiquated and incomplete. That said, VR is the costliest move, therefore integrating music video is the most logical next step for any of these platforms.

Regardless of which type of video content they invest in, a company such as Spotify needs to do something and make video a priority. Simply offering the same millions of tracks that everyone else has offered for years is not a sufficient offering anymore -- users are looking for the videos alongside audio.

YouTube is the largest music destination in the world for a reason. The platform offers music video. If a pioneer like Spotify  does not continue to innovate its offerings in a methodical way, similar to many platforms from the media space that were in the same position years ago, it won’t survive.
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