Dive Brief:

• Spotify is actively increasing its revenue opportunities through new original content as well as a deal to turn its data into targeted ad dollars.
• The deal with data management platform Krux is built around turning the data Spotify has collected from users into revenue from targeted advertising.
• The streaming music service is in the process of creating original video content in the form of 12 series featuring celebrities including Tim Robbins and Russell Simmons, according to Bloomberg. The episodes for each series are short, ranging from a few minutes to 15 minutes and will be free for Spotify users in the U.S., U.K., Germany and Sweden.

Dive Insight:

Both moves show that Spotify is ready to get a piece of the video ad share pie.

"Music will always be most important, but our audience likes us and wants more from us," Tom Calderone, Spotify's content partnerships chief, told Bloomberg. "We have to figure out a second act, and I think it will come out of video. The idea is to make sure users know they can come here for something other than playlists."

Currently, a good amount of video ad revenue is going to YouTube and other digital outlets that have recently ramped up their video capabilities, like Facebook. For Spotify, offering original video content is a way to get users accustomed to the idea of turning to Spotify for video content. 

Spotify isn’t alone taking on YouTube for online video supremacy. Facebook has been very active for months now rolling out new video ad units, offering hardware for 360-degree video, emphasizing video in its user’s news feeds, and making its new Facebook Live streaming video service a point of emphasis.

By turning its unique data set into an asset via the deal with Krux, Spotify is able to give marketers a way to target and personalize campaigns for the 75 million users listening to music on the platform.

"With Spotify and Krux working together, we have access to first-party data allowing us to better target specific people and user groups such as those looking for auto insurance and commuters," Cyndie Beckwith, vp of marketing at Esurance, and a Spotify advertiser, told Ad Age. "For this initiative, we wanted to add on some similar targeting approaches that we've been leveraging across desktops to streaming audio, and in particular mobile streaming audio."

Through both initiatives, Spotify is positioning itself to be a destination not just for music fans but for marketers as well.