Spotify mute on NZ video plans

Spotify chief executive Daniel Ek first revealed the firm’s plan to expand into video distribution in May last year.

Music streaming service Spotify is declining to discuss whether it will branch out into video in New Zealand in a move that would further shake-up the television market.

The « all-you-can-eat » subscription music service began offering video clips in the United States, Britain, Germany and in its home base of Sweden in January.

So far its video content consists mainly of short clips from the likes of Comedy Central, ESPN and the BBC.

However, there has been speculation that Spotify could emerge as a mainstream rival to the likes of Netflix and traditional pay-television companies such as Sky Television.

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Netflix is increasingly eyeing exclusive global rights to film and television while traditional pay-TV companies often seek exclusive local rights.

But Spotify’s business model has been based on obtaining global rights that are not exclusive and do not prevent competitors from streaming the same content.  

It offers more than 30 million music tracks for a flat-rate subscription of $12.99 a month and has more than 30 million paying subscribers.

Spotify declined to be interviewed on any plans for distributing video content in New Zealand or on the wider philosophy for the company’s move into video overseas.

The service it was offering in its four initial markets was « still very much in the early stages » and the company wasn’t in a position to go into detail yet, spokesman Rami Mallis said.

« In terms of local news around video and roll-out to other markets, Spotify is only really able to share that they’re learning as much as they can from the first four markets.

« Learnings from there will then inform their future expansion, » he said.

One New Zealand television industry source said a broad expansion from music into video was logical for Spotify, given that it had an established means to deliver content and that video was a far larger market.

Another agreed, forecasting subscription video would become the domain of « large global players ». 

Spotify has a marketing partnership with Spark which offers Spotify’s premium service « free » with some Spark mobile plans.

It is in the process of raising US$1 billion (NZ$1.4b) from United States private equity firm TPG Capital and hedge fund Dragoneer Investment Group in a funding round that is expected to be completed this week.

Some bloggers are speculating the new funding may be used to fund an acquisition in the video market.

It faces competition in the streaming music market from the likes of Apple, Pandora, YouTube, SoundCloud and Tidal.

 – Stuff

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