Spotify is a music app. You know that, we know that, the whole world knows that. It’s also the biggest and most successful music app in the world. It’s seen off a challenge from Jay-Z and Tidal, it’s got a larger market share than anything owned by Apple and Amazon, and it has an active user base of more than two hundred million people. It’s not hugely popular with some of the artists whose music appears on the platform, because they feel they’re paid peanuts compared to the amount that Spotify makes, but it dominates the industry that it exists within. Apparently, that’s no longer enough for the company and the people who run it.
The problem with being stuck in a one-dimensional streaming war is that even when you’re winning, everybody else involved in the battle begins to eat into your market share. Apple Music might be a long way behind right now, but it passed fifty-five million subscribers at the start of the year and then introduced new features in February designed to help it catch Spotify in the long run. Without adding new products, Spotify would have to work even harder just to hold on to its current share of the market. If that market share drops, so will the company’s profits. To continue to grow and prosper, Spotify needs to move outside of its music bubble and start testing the waters in other forms of entertainment.
This isn’t a new idea for Spotify. A little earlier in 2020, it began to introduce video podcasts to its platforms for a select number of contributors and partners, marking the first time the company attempted to do anything with visual media. While the move was initially limited only to these podcasts, it isn’t too difficult to imagine a future where the songs available through the platform could be accompanied by music videos as and where they exist. That would make Spotify distinct in the market from Apple Music, and might even make it a threat to YouTube, which currently has total domination over the music video market. If you want to watch a music video at the moment, YouTube is the only mainstream place to do it aside from a musician’s own website or social media outlets. Further expansion from Spotify might change that. The bad news for YouTube – and, we suspect, for several other media companies, is that Spotify is now making a further expansion. It just isn’t the expansion we expected them to make.
Within the past few days, Spotify has announced a brand-new partnership with Chernin Entertainment. The deal has been struck with one specific intention – to take podcasts and other forms of media from Spotify and turn them into either television shows or movies. Right now, it’s hard to imagine what that might look like. Podcasts are podcasts. Television shows are television shows. A series of video podcasts might be deemed a television show (of sorts) in its own right, but if Spotify wanted to make something like that, it could do it already. The Chernin deal has obviously been inked with a grander purpose in mind, and Spotify’s competitors will now be asking themselves what their grander purpose could be. Might it be the case that Spotify, like so many other giant entertainment companies, is considering branching out into its own subscription television network?
We’ve seen this idea play out before many times. Amazon was once nothing more than a home delivery company, yet it now owns a huge subscription television service. Netflix used to rent DVDs out through the mail and now owns the world’s largest movie streaming platform. Going further back, online slots websites were once thought of as nothing more than a cute quirk of the internet. Casinos didn’t consider them a threat. Over time, online slots websites like Jumpman casino added more and more features from casinos, including poker tables with live dealers and roulette wheels. By the time the traditional casino companies realized what was happening, it was too late. Online slots websites had cornered the market and now – other than in territories where it’s illegal to own and operate online slots websites – they’re the most popular way to play casino games. If the established players in the world of TV and movie streaming aren’t watching this latest Spotify development very closely, they might come to regret it in the future just as some casino firms are regretting their lack of foresight today.
Chernin is a company with a fine pedigree when it comes to televised and cinematic entertainment. They were responsible for the award-winning and critically-acclaimed “Ford v Ferrari” movie, along with “New Girl,” and “Hidden Figures.” Clearly, their specialty is not podcasts. The deal gives Chernin ‘first look’ at all Spotify’s intellectual property with a view to using that intellectual property to develop TV or movie pitches. Spotify claims that it already has 250 TV-suitable products in its library for Chernin to get started with. Nobody, other than the two entities involved in the deal, has any idea what those 250 products are. The platform doesn’t currently host 250 high-profile podcasts, so something else has to be making up the numbers.
While there’s obviously a lot that we don’t know about this partnership, and some crucial information that will likely only become apparent in the fullness of time, this new connection gives Spotify access to Hollywood-level production facilities without having to pay to acquire them itself. That’s a good deal for a company that has, until now at least, appeared to be content to be a music streaming service. For Chernin, the attraction must be whatever it’s seen in Spotify’s archives. Could they be looking at making a series of musical biography films? Will we see stars from podcasts given their own bespoke movie vehicles to star in and see whether they can win a mainstream audience? Are we missing the point completely, and there’s a whole different angle on this that nobody else can see? We can’t say, but something exciting is obviously happening, and it will have ramifications for the entertainment world in general. Spotify won the music streaming wars at a canter. Who knows what it might do to the video streaming wars if it decides to saddle up and ride in.