Traditional broadcast and cable executives who have developed neck pain from looking over their shoulders will get some relief from this news: Spotify is refocusing its video strategy to stick to music.
In recent years, the high-flying streaming music service had been seen as another potent tech rival to the legacy networks, along with Apple and YouTube. Already, the deep-pocketed Netflix and Amazon have turned the TV business upside-down. But it turns out that consumers wanted Spotify to stay Spotify.
The company confirmed it parted ways with Tom Calderone, head of original video and podcasts, after the service’s initial foray into original video content fizzled. It will now focus on popular playlists like Rock This as well as documentary efforts like Rap Caviar and related music features.
Calderone, the former head of VH1, had ordered a raft of original series from the likes of Russell Simmons and Tim Robbins but none gained traction. In part, that’s due to the nature of Spotify—as a streaming music service, it is more of a lean-back experience than with video.
In 2015, Spotify’s video ambitions (which were first made clear in a since-scuttled attempt to create a skinny-bundle service in 2013) were made more clear. After initially licensing short clips from Vice, Comedy Central and ESPN, Spotify last year brought in Calderone to run an in-house studio. But with business booming on the music side—led by Spotify’s 60 million subscribers, streaming is returning the industry to revenue levels it has not seen in more than a decade—there is less of a clear path outside of music. Complicating the strategic decision further is Spotify’s planned IPO later this year or early next.
Video offers Spotify cost-savings as well. Programming unrelated to music does not carry the same royalty obligations of music streams. But the very nature of the Spotify experience, which has proven so effectively disruptive in audio, did not prove additive in terms of video.
“What Spotify has come to learn is that Spotify is amazing when you have a passive audience—when the audience doesn’t need to look at a video,” a Spotify content partner source told Digiday. “Some of the Spotify videos that did best were TED Talks, because those don’t actually need to be watched.”