Dive Brief:
- Spotify last week confirmed its head of original video and podcasts Tom Calderone is no longer with the company, according to a report in Bloomberg. Calderone previously served as head of the cable network VH1.
- Spotify, known for its music streaming, is scaling back its approach to video and for now will focus video initiatives around Rap Caviar, its most popular playlist, along with the Rock This playlist and other features, a spokesperson told Bloomberg. Spotify intends to ties its video offerings more closely to the music industry and potentially away from the type of projects Calderone commissioned, including series from producers like Tim Robbins and Russell Simmons.
- Despite Calderone leaving, Spotify will continue to focus on video and podcasts. Its podcast investment is growing and it has bought ad spots on popular shows such as "Reply All" and "The Bill Simmons Podcast." Spotify plans to introduce more original podcasts as well, adding to recently-launched offering "The Upstream," which is hosted by its CMO Seth Farbman.
Dive Insight:
Calderone's departure suggests that Spotify has not managed to fully engage its over 140 million monthly active listeners — and 60 million paid subscribers — in the video and podcast departments. These two pieces of its marketing puzzle will be imperatives to monetize as the digital streaming service is reportedly preparing to go public toward the end of 2017 or early next year. The company's financial losses are only widening, according to The Motley Fool, which isn't unusual for a new-ish tech player but will likely make for a shaky IPO that could ultimately cause Spotify to lose out to a growing stable of competitors that includes Apple Music and Tidal.
Spotify recently signed a long-term licensing deal with Warner Music Group, per Bloomberg, which potentially ramped up the pressure to keep its video content more closely squared with the music industry. The news also points to the difficulties in marketing around audio-only content — content consumers don't have to be looking at a screen for. Marketers' interest in audio content marketing and advertising for podcasts is only growing with these format's popularity, but video is seen as the next big piece of the mobile marketing puzzle.
Video could be a major challenge for Spotify in that regard. Its ad-supported model currently offers a vertical video ad format called Branded Moments, which seeks to engage listeners during particular times of the day like "workouts." There's also a glut of original video content pouring out of the digital space, namely from social media players like Snapchat, YouTube and Facebook, the latter of which formally launched its TV-like Watch tab late last month. Spotify could fare much better with podcasts, and the Interactive Advertising Bureau forecasts podcast ad revenue will surpass $220 million this year — an 85% increase over 2016.
