Spotify adds video clips, original content to streaming mix, hoping to speed ahead of Pandora

Confirming rumors that circulated earlier this month, Spotify announced it is expanding from audio streaming to video, offering licensed programming from major media companies, original content and video podcasts. It's also integrating video into its playlists.

"For the first time, Spotify is adding video clips and audio shows to the music mix," the company said in a blog post on its site.

Dubbed the "Now" experience, the additional content, along with a new interface, rolled out to subscribers using iPhones in the U.S., UK, Germany and Sweden. Content will include news clips and other content from broadcasters like ABC, NBCUniversal and TBS, as well as other sources like multichannel network Maker Studios and networks like Comedy Central, ESPN and Conde Nast.

The timing of the announcement isn't exactly a coincidence: Spotify is still searching for a profit in the midst of a streaming-music race with competitors Pandora, Beats and Tidal. And it's trying to raise $400 million from investors, The Wall Street Journal reported, citing unnamed sources.

According to WSJ, Spotify has been in talks with media companies for two years. Chief Executive Daniel Ek told the publication that video ads will arrive soon on Spotify, and will be "a very important source of revenue."

Will other music streaming services follow Spotify's lead? That remains to be seen, and could depend on how well Spotify's video ambitions work out. To be successful, Simon Jones, VP of marketing at Conviva, told FierceOnlineVideo, Spotify needs to pay attention to video quality, particularly for its $9.99 monthly premium subscribers. "…our data clearly shows that consumers engage most when they are served an optimized experience; and that they disengage when they are dissatisfied. So it's a calculated risk for Spotify: with excellent content, delivered smoothly, they can capitalize on the shift to Net TV; missing on the quality of experience on video--which they have aced with audio--could represent a challenge to their otherwise pristine brand image."

For more:
- WSJ has this story
- Spotify has this blog post

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