Spotify is one of the most popular streaming music services out there, even if some reports suggest it has a high churn rate in the United States.
With 180 million listeners, Spotify is the giant in the room, as Apple Music aims to topple them. But the majority of Spotify’s listeners are on the company’s free tier, and not the monthly subscription Premium model. In a continued effort to have those free customers switch over, the company is eyeing new ways to try and make that transition a little easier — while also making some worthwhile changes for the free customers that don’t plan on switching at all.
According to a report from Ad Age, Spotify is currently testing the ability for free customers on the platform to skip any audio or video advertisement whenever they want. Spotify’s head of partner solutions, Danielle Lee, actually confirmed the testing, and explained that Spotify sees the ability for customers to switch ads means they will bypass the ones they don’t want to listen to or see, and maybe stay on the ads they don’t mind hearing or looking at.
Spotify sees this as a way to learn a little bit more about its customers, and tailor the ad experience as such. The company calls this new idea “Active Media”. Spotify has been testing this feature in Australia for about a month now, and while the company does plan on deploying it to its global user base, there is no timeline for when that might happen — if it happens at all.
“Our hypothesis is if we can use this to fuel our streaming intelligence, and deliver a more personalized experience and a more engaging audience to our advertisers, it will improve the outcomes that we can deliver for brands,” Lee says. “Just as we create these personalized experiences like Discover Weekly, and the magic that brings to our consumers, we want to inject that concept into the advertising experience.”
Spotify is working on a brand new version of its free tier, which it aims to make it easier to use on mobile devices. But the idea is to have those free customers jump over to the Premium options, whether it’s a student, family, or individual account, so they can start paying towards additional features. Free customers may be able to skip ads in the future, but it doesn’t look like they’ll be gaining access to things like the ability to search for on-demand music, among other features.
If you’re a free Spotify listener, what would the company have to do to get you to start paying?
Just to get the comparison out of the way, Apple has made no bones about the fact that it doesn’t plan on offering a free tier for its own music streaming platform, Apple Music. It offers the same $9.99-per-month individual monthly offering, as well as other options for students, families, and even a yearly subscription model. But no free tier — but also no ads anywhere on the servce.
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