We’re in the midst of a content boom. Executives on the production line are thrilled at the volume of content being commissioned and licensed, both in television and in digital. There’s almost too much content being produced as distributors like Verizon, Comcast, Hulu, Fullscreen, Netflix and AT&T continue to move deeper into the space.
When Spotify soft-launched the video business in May of 2016 after rumors that the music-streaming service was about to go hybrid, it wasn’t alone. Other streamers like YouTube and Tidal were making moves to become hybrid streaming businesses, as well. Its first slate of 12 originals began debuting at the end of last year, of which “Drawn & Recorded” (Gunpowder & Sky), “Trading Playlists” (NFL’s ACE Media), and “Flash Frame: Blink-182” (Fusion) were early performers.
A Call for Programming
Spotify is still set to spend upwards of $30 to 50 million on content deals across 25 projects roughly for the year. According to sources, the company is set to do around 10 bigger budget projects on the top end. Series on the higher budget scale would land around $1 million to $3 million per series (10 episodes on average) while those on the low are reportedly seeing $15,000 per episode. Spotify will also look to underwrite those budgets with brand sponsors and integrations, though its commitment to deficit finance is said to be stable.
Not surprisingly, Spotify’s call for formats spans performance, storytelling and music+culture series, most of which are short form.
And Spotify is being vigilent on its audio vs video attention by users. Sources with projects on the platform note that Spotify claims lean-in viewing has continued to increase though the style of formats being produced and distribtued by the streaming platform indicate audio-only playback is still an important factor for programming.
Content sellers tell VideoInk that despite a few internal hurdles and staffing changes that Spotify is still very active in the discussions for acquiring IP. Viewership on those shows as well as the corporate culture are said to be among Spotify’s bigger issues though as it shifts from music streaming service to media company.
A Broken Sound House
Like Verizon’s go90, Spotify’s first-wave push into video was met with a steep learning curve. According to various sources who have worked with the company, though, Spotify’s challenges come from both internal discord and the usual freshman daze.
Those in the know claim that Spotify’s flat organizational structure has left both the internal teams and the external sellers paralyzed in the decision-making pathway. According to one source, “everyone has the same title and nobody knows who has real power to sign off on the projects.” And now most of the original video team has departed — Matt Baxter, Global Head of Originals and Eric Besner, Head of Content Partnerships among them.
The team is now led by Jim Fraenkel.
With companies like Apple, Tidal, now funded by Sprint, and YouTube Red, on Spotify’s heels in original video, the company can’t afford some of the issues it faced in 2016.
And so far, Spotify, though not alone in the hurdle to gain real viewership for video, has yet to fully prove out that the shift to video is going to be fruitful.