Spotify: free music streamer, procrastination enabler, and soundtrack to household chores around the world may soon become much much more. The service is reportedly toying with the idea of offering original video content.
Spotify has proven to be wildly popular with over 15 million people using the audio streaming service (though only a small number shell out for the paid subscriptions, which is basically what is keeping the company financially afloat). The company sells ads on its free service, but the overall business model is based on luring customers away from the free service and into paid subscriptions (in the US, it's $5 a month for ad-free streaming, while it will set you back $10 a month to be able to download music and listen offline across all your devices). This model hasn't exactly proven to be lucrative.
But the company may soon have more to offer. According to a report from BusinessInsider, Spotify is seeking partners to create on-demand video content that would put it in direct competition with the Netflixes and HBOs of the world.
Millions of people have downloaded Spotify, so the company already has a recognized platform with international reach that would allow it to easily offer additional services and content. In a way, the company already is its own network.
A boon or bust for consumers?
As long as the company's services remain easy to access across devices, Spotify will just have to lure the right talent to produce quality content.
Consumers have shown their willingness to shell out for unedited, commercial-free video programing. That's the plan that HBO successfully implemented in the 1990s with hits like Oz and The Sopranos (and continues to experiment with now), and what streaming services like Netflix and Amazon are just now beginning to flirt with.
Currently, consumers have shown their willingness to pay between $15 and $20 per month for premium channels like HBO or Showtime (in addition to a basic cable subscription), and $8 a month to stream Netflix's content or $6.67 a month on Amazon Prime (based on $79-a-year fee). The good news for consumers is that, in theory, more competition will drive these prices down even further while creating more content venues.
We may see a lot more "studios" popping up in the near future.