Spotify unveiled its largest outdoor advertising campaign ever on Sunday, with large, hand-painted ads going up in ten cities around the world. In New York, personalized billboards can be seen in different neighborhoods. One ad shows that Justin Bieber was the most popular artist in Williamsburg while The Weeknd was most popular in the East Village.
The advertising push comes as Spotify looks to solidify its presence around the world. With 20 million paying subscribers and 80 million free users, Spotify is a leader in the music streaming business. With so many listeners, such insights into specific communities are easy to come by due to the sheer volume of data that is generated by users each day.
Spotify is putting this data to good use this year with the roll out of its “Year in Music” feature, which launched this Monday. Users can go to spotify.com/2015 to get personalized statistics on their listening patterns for the whole year (this author learned he listened to more than 36 days of music this year and 1,500 different artists). There, users will also be able to learn that 2015 was the year of “tropical house” music and will be presented with playlists to go along with some of this years biggest events. For example, there is a “#blacklivesmatter” playlist, as well as a “Love wins” playlist dedicated to the Supreme Court’s ruling this summer in favor of same-sex marriage. Spotify hopes that users will share their data as well as these playlists on social media to generate more interest in the service.
In fact, Spotify believes that unlocking this information for the casual user will help it convert free users to paid users. This conversion is critical to Spotify’s business model. The launch of this ad campaign and the “Year in Music” features comes at a critical time for Spotify, which faces new competitors such as Apple Music and a growing trend of musicians withholding new music from the service. This month, for instance, Adele withheld her new album, “25.” Coldplay petitioned to make their new album available only for paid subscribers. Those in the music industry contend that withholding music from streaming services increases physical and digital music sales, which are more profitable for musicians.
It appears that the Spotify’s free streaming model is in jeopardy as the year comes to a close, with reports indicating that Spotify executives have given into demands from artists such as Adele and Coldplay that their music only be available to paying subscribers. This is in contrast to Spotify’s current model, in which it offers its full catalog of millions of songs to all of its users by serving ads to users who do not pay. Insiders say that in the future Spotify will restrict certain music from some artists to only customers who pay for its $10 per month “unlimited” service.
Clearly, 2016 will be an important year for Spotify as it tries to maintain its position in the music business. Its new ad campaign and “Year in Music” feature show Spotify’s unique strengths: a large user base and extensive data. Of course, its weakness is that the music industry is tired of some 80 million free users streaming whatever they want, when they want. In 2016, Spotify will have to carefully navigate between pleasing its users and musicians. It will be a difficult process, but hopefully a successful one.