Streaming giant Spotify expands into video, original content

Streaming leader Spotify on Wednesday announced an expansion into video and original content, reaching beyond music as the company faces challenges to its dominance and strives to turn a profit.

Spotify, by far the largest company in the booming streaming industry, said it wanted to turn into a broader, and more personalized, platform to bring in subscribers throughout the day.

The upgraded Spotify platform will for the first time support videos and offer news and other non-music content provided by major media companies.

Daniel Ek, the founder and chief executive of the eight-year-old Swedish company, said that Spotify was recognizing the all-encompassing power of smartphones in modern life.

Spotify's core mission remains music, but it wants to give users fewer incentives to switch to other platforms to read the news or watch videos, Ek said.

The upgrade "comes from the realization there is an incredible opportunity to soundtrack your entire day -- and your entire life -- in all its complexity," the 32-year-old streaming pioneer told a launch event in New York.

- Original content -
Ek said that Spotify had partnered with a wide range of media companies including major US networks, the BBC, Vice and comedy network Adult Swim.

While providing podcasts and other production from media partners, Spotify said it would also aim to offer original content.

Spotify said it would work to personalize streaming, including through a feature that offers uninterrupted music to match the pace of running. It will also make suggestions to users based on their listening and viewing history.

The music will be original to Spotify and was directed by Dutch electronic superstar Tiesto, who told the event that he knew many of his fans worked out to his beats.

Ek said that the updated platform would be available immediately in the United States, Britain, Germany and Sweden, and would be rolled out in the coming weeks to the 54 other countries and territories where Spotify is present.

- Growing competition -

Ek said that the new Spotify personalization was in response to changes in consumer behavior, with more fans now discovering music online rather than flipping through records at a store.

Hailing his company's role, Ek said that Spotify users discovered new artists two billion times every month.
"There is a profound change happening in music and it's something we couldn't have foreseen when we started the company," said Ek, sporting jeans and a blue T-shirt with an image of a guitar.

"It's the biggest change since the inception of sound recording," he said.

But Spotify has been controversial among some artists, most famously Taylor Swift, who say that streaming insufficiently compensates creators.

And Spotify, despite its rapid growth, has not turned its major investments into profit. In filings earlier this month, the company said that its net loss tripled to 162.3 million euros ($182 million) in 2014.

Ek said that the upgraded Spotify would offer more opportunities for targeted advertising and partnerships with companies.

Spotify earlier this week announced a partnership with Starbucks, which will let its baristas choose tracks through the streaming service at the 7,000 cafes owned by the coffee giant in the United States.
Spotify as of late 2014 reported 60 million users. But three-quarters of them opted for a free tier of service, which is particularly controversial in the music industry.

Spotify responds that its content is fully licensed -- unlike platforms such as YouTube -- and that it has paid back $2 billion to artists.

And the company is bracing for growing competition.

Rap mogul Jay Z recently launched a redesigned Tidal, a streaming platform that offers higher-end audio files as well as video and exclusive content.

Apple -- long the giant of digital music through iTunes -- is expected to unveil an updated streaming service soon.

Other competitors include Deezer, Rhapsody and Google Play.

Rdio this month unveiled a subscription of $4 per month, undercutting Spotify's $9.99 for its advertisement-free premium service.