Spotify Reportedly Planning To Reboot Video Strategy, Cancel All Current Original Series

Spotify is reportedly planning to reboot its video strategy for the third time. Spotify is canceling its current lineup of original video series on its music streaming platform, along with video content that it hasn’t even released yet.

According to Bloomberg’s report, Spotify wants to reboot its video strategy so that it can find other means to make money besides music and royalties. Spotify’s rebooted video efforts will be handled by Courtney Holt, who was recently appointed as the head of Spotify’s video and podcast offerings. Holt, who previously worked for music labels and other media companies in the past, will be responsible for coming up with a new video format that’s unique to Spotify, people with knowledge on the matter said.

The new format is currently codenamed as “Spotlight,” and it’s simply described as combining audio, images and video. Beyond that, no other information was given on what Spotify is planning for its new video strategy.

Although Spotify is the leading music streaming service in the world, the company has been looking into offering other types of content to generate new streams of revenue. Spotify may have 140 million active users worldwide, but only 60 million of those are paying for a monthly subscription. This is why the Swedish company is spending more money on royalties and distribution costs, while ads only account for just 10 percent of sales.

By offering video, Spotify would be able to generate a new stream of ad revenues, while also convincing some free users to start paying for a subscription. Spotify first started its video efforts in 2015 by licensing video clips from existing networks like Comedy Central and ESPN along with some original video content, as pointed out by The Verge.

Currently, Spotify has its own slate of original shows like “Spotify Landmark” and “Flash Frame.” The company even released it’s own version of Apple Music’s “Carpool Karaoke” earlier this year called “Traffic Jams,” which teams up hip-hop artists and producers. With Spotify planning on canceling all of these shows and preparing a reboot, the ongoing shows may not not have been successful enough.

Bloomberg said on its report that the shows may have suffered because of the general lack of promotion. This means that a lot of Spotify users may not even be aware that the music streaming service was also offering video content. Spotify’s previous video efforts were headed by former Buzzfeed head of video Matt Baxter and former VH1 president and Viacom executive Tom Calderone. Last year, the company said that it would launch 12 music-related shows in 2017.

Spotify’s main goal with its new video strategy is to increase its advertising sales. Making new original content could help with that since original video shows won’t involve the same kind of royalty and distribution costs, according to Engadget.

Back in May, Spotify reported that its fiscal 2016 losses had grown to around $637 million on revenue of $3.4 billion. Offering original video content could alleviate those losses, but Spotify needs to find a way to get users to watch its video content.