Music streaming service Spotify is reportedly toying with the idea of offering original video content.
Spotify has proven to be wildly popular with over 15 million users. 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 (€4.99 a month for ad-free streaming, while it will set you back €9.99 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 according to a report from BusinessInsider, Spotify is seeking partners to create on-demand video content that would put it in direct competition with Netflix.
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 – the plan that HBO successfully implemented in the 1990s with hits like Oz and The Sopranos.
Currently, consumers in the US 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.
Netflix has seen some success in creating its own original content, with political drama House of Cards being well-received. The revived sitcom Arrested Development is due to make a reappearance on Netflix in May.
Of course this begs the obvious question, why not move into becoming a recoed label instead of a studio?
IDG News Service
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