Report: Spotify to scrap original video content in lieu of new “unique” format

Spotify begana move to make revenue from original video in 2015, but it continues to be problematic as it tries to find the right mix that is going to captivate 140 million active users and 50 million paying subscribers.

According to Bloomberg, its new Head of Video and Podcasts, Courtney Holt(pictured) has cancelled the current schedule of original shows announced in May and gone back to the drawing board to create new unique ones.

Shows already on air will not broadcast new episodes, and unreleased series will not see thelight of day.

Holt, former head of Disney’s Maker Studios, joined in September.

He is said to be looking for something “unique to the Spotify format”, said to be a seamless mix of audio, images and video.

The shows launched by Spotify’s last Head of Video, former Viacom executive Tom Calderone, left abruptly in August, have not taken off with users.

It would also extend the relationship with artists discovered on some of its playlists, from discovery to behind-the-scene docs to collaborating on a new series.

The launch pad would be most likely it’s flagship Rap Caviar playlist which has 7 million followers and now presents hip-hop concerts.

In May, Spotify announced it was working on 12 new series that revolved around music and pop culture, of 15 minutes length.

These included music documentaries and interviews (acts included Green Day, Metallica and Blink-182), Rush Hour where rap entrepreneur Russell Simmons brought artists together for lightning-fast remixes and mashups, a hip-hop version of James Corden’s Carpool Karaoke called Traffic Jams, T Bone Burnett’s Drawn And Recorded, and Landmark about highlight from music history.

There were also clips from MTV, ESPN and Comedy Central.

A second slate was to include more comedy, animation, and collaboration with artists.

But so far customers have not taken to the shows.

Spotify knows it needs to hammer the original video mix right, as it is counting on it to be an important revenue source.

It is essential for a company where 80% of its revenues go to licence fees to music industry associations.

More than half of Spotify’s customers use the free ad-supported service, but ads account for just 10% of sales.

In May, Spotify its losses in the 2016 financial year almost doubled (47.8%) to US$637 million on revenue of $3.4 billion,

Spotify is not the only platform that is relying on original video to keep users and subscribers entertained, while not having to rely on huge music licensing costs.

Apple Music’s offerings include a Carpool Karaoke spinoff and will i. am’s Planet of the Apps where app makers make 60-second pitches for funding similar to Shark Tank.

It is expected to spend $1 billion on original videos in 2018, including dramas and ways that musicians can interact with their fans.

Apple Music too has faced criticisms for some of its original video offerings while Facebook and Google have also been pouring a substantial amount of money in.

Online video advertising sales will grow 28%t this year, according to Magna.

A study by Advertiser Perceptions found that US marketers expect to spend more than $9 million on their brand’s digital and mobile video advertising this year—a 67% increase from 2015.

But making original videos is as slow and painstaking as creating hardware, and will need a huge marketing spend so users are available on what’s offered.

One of Spotify’s problems, according to analysts, is that not enough of its customers seem to know what’s there or had difficulties finding them in the app.

Another question mark is if the algorithms used for music recommendations may not necessarily translate to videos.

But executives believe that Holt’s background developing products with engineering teams could help him overcome this problem.

His early career in record labels as Atlantic Records and Interscope Geffen A&M and executive roles at MTV Networks and MySpace Music will also help towards the solution.