It’s common knowledge that Spotify isn’t exactly profitable. As avid user, I’ve really liked their latest product introductions: Discover (suggested content from Spotify), Activity (what your friends are listening to), & Direct Artist Following. With those features and Spotify’s financial struggles in mind, one revenue generating product seems obvious: sponsored content and placements. As we’ve seen with Facebook, it’s much easier to sell advertising inside an algorithmically generated content feed. And with Discover, Spotify has built just that.
Spotify builds a complex profile of your music tastes. They get the data for that profile from a combination of places: what you listen to, what you add to playlists, what you “like” on Spotify Radio, what your friends and people you follow listen to, etc. So, let’s say I “follow” Justin Timberlake. And listen to his music. And add him to playlists. And on and on. Why doesn’t Spotify sell a placement in my Discover or Activity feed to a similar artist? Preferably, it would be an artist that Spotify’s data shows I will probably like. Or, like Facebook, Spotify should start charging Justin Timberlake to alert me inside Spotify and by email when he releases a new album. That kind of targeted email marketing is incredibly valuable to artists of any stature.
The cherry on top: if done in a clean enough way, promoted/suggested wouldn’t even intrude on user experience. In fact, it could be a genuine value add.
Seems like a layup to me….
P.S. This ad product also allow Spotify to further monetize premium subscribers. It wouldn’t be limited to “free” users.
*** Apologies for grammar, it was a quick thought. I’ll clean it up later***