NEW YORK -- Spotify is changing its tune -- from "listen up" to "look here."
In a move to appeal more broadly to consumers, the Sweden-based music service showed off new features Wednesday including video, podcasts and specialized experiences for people like runners.
During the event, Rochelle King, Spotify's vice president of design and user experience, demoed a carousel of playlists that will be tailored to particular members on a new "Now" start page, including video clips from Vice News, Viacom's Comedy Central and Nerdist News. Spotify's main catalog of songs will be interspersed with these clips as well as podcast spoken-word tracks.
"There were a lot of times when people wanted to use Spotify but had to leave it to come back for five minutes or 10 minutes of entertainment," Chief Executive Daniel Ek said in an interview. "View this step as how we expand music to more places in your life."
Adding video and other types of content could encourage people to spend more time using Spotify and, in the process, generate more advertising revenue. That could help the company keep a tier that's free for you. But it also means that Spotify's format -- a monthly subscription that gives members unlimited access to songs -- will become more complicated for mainstream consumers to understand.
The move also repositions Spotify before Apple launches its own subscription service based on Beats Music, part of its $3 billion purchase last year of headphone maker Beats. Apple is expected to relaunch the subscription service next month at its annual Worldwide Developers Conference.
Spotify is the biggest service of its kind by listeners, but its rapid growth has been matched by ballooning losses -- 162 million euros last year, or more than $180 million. Part of the reason is most of its users remain on its free, ad-supported tier rather than subscribing for $10 a month, which generates more revenue per user. Digital video could make the ad-supported free service more profitable. Prized by advertisers for how it commands viewers' attention, digital video saw ad spending more than double on mobile devices and jump 38 percent on desktop computers in the US last year, according to researcher eMarketer.
Spotify already has video ads. By including videos people theoretically want to watch, the company can better ensure that people are actually watching the commercials, rather then simply hearing them as the service plays in the background.
However, making Spotify a source for more diverse entertainment risks confusing consumers unfamiliar with the new model of charging a monthly $10 subscription for all the music they want to hear. Spotify identifies its core users as tech savvy early adopters and people who are dogged music fans -- but that leaves a wide swath of mainstream consumers untapped. Will those potential new customers be confused about what they're being asked to pay for if Spotify has comedy clips from Comedy Central shows and news segments from Vice News?
Ek said the new features work toward Spotify's goal of offering a more personalized experience. "Maybe you won't watch the comedy clip, but we will learn that, and we will take it away from you if it's in the way for you," he said.
Apple's entrance into subscription music, which it resisted for years, has the potential to both harm and help rivals like Spotify. Apple will become an intimidating direct competitor, with a globally recognized brand and an established relationship with music buyers worldwide through its years as the primary purveyor of digital downloads through iTunes. Yet one of the most difficult challenges for upstarts like Spotify has been educating mainstream consumers about what a subscription music service is; Apple launching such a product will go a long way toward informing the masses about this model.
Also on Wednesday, Spotify unveiled other new features, including one designed to find soundtracks for people out on a run, based on their gait, as determined by motion sensors in their smartphone.
The new Now experience will begin rolling out Wednesday to iPhone users in the US, UK, Germany and Sweden, with more markets and platforms to follow in the near future. Spotify Running will start rolling out to iPhone users globally Wednesday.
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