Spotify for Artists is now offering “paid” products. That means the marketing that was free on the platform, now costs something. But it’s not without gain. The strategy aims to monetize artists through the use of tools and resources that they hope will connect artists to fans at an unprecedented rate, ultimately allowing the artist to “live off of their work.”
Testing is still underway, beginning with “pay per click” ads, but according to Hypebot, this is the first of many to be released with Spotify’s new Marketplace strategy.
Spotify is leaning into their desire to be a “two-sided marketplace” which basically means buyers and sellers interact on a particular platform. They state this new strategy will offer a more distinct experience for creators on Spotify, instead of a one size fits all.
Artists, what do you think? Are you hopeful for a bigger, more quality fan base to come about due to the use of paid marketing?
Two-Sided Marketplace excerpt from today’s Spotify report to investors:
So Marketplace is about meeting the needs of creator teams to create art, engage with, grow, and better monetize their fanbase. These initiatives drive both revenue growth and content cost savings. We expect to give more detail on the financial benefits of the Marketplace and the impact on 2020 guidance on the 4Q19 earnings report.
Recent highlights of positive developments with our marketplace strategy include:
- Spotify for Artists – Valuable analytics, identity management, and promotion tools with more than 465,000 monthly active artists, up 365% from the 100,000 announced at Investor Day. These monthly active artists account for ~80% of the streams on Spotify. Key recent additions to the feature suite is Canvas – a tool that enables artist teams to add looping visuals to their tracks. Many artists have seen substantial uplift in their streams by using this tool.
- Sponsored Recommendations – Available to select major and independent label partners as part of our recently announced paid beta in the U.S., this is Spotify’s first cost per click ad product which leverages our listener graph of music tastes to promote new releases to free and paying users.
- SoundBetter – In September, we announced the acquisition of SoundBetter, a music production marketplace for artists, producers, and musicians with 180,000 registered users.