So Spotify might not just be a paper tiger in the streaming music business — it might soon be a velociraptor in the streaming movie business as well.
According to BusinessInsider.com, Spotify’s intent to merge into the streaming movie business, currently dominated by Netflix and HBO, is moving steadily into the funding and partnering sector of their latest venture. And like the old business adage goes: If you move into the funding and partnering sector, that means you are, like, for-real serious. Of course, nobody is talking on-the-record yet, so good luck getting Spotify to admit what they are planning.
While popular with its fans, Spotify has yet to really resonate within the scope of its primary interest: music. So why is a music company who isn’t really succeeding in music suddenly going to try and navigate the predatory waters of the music business? Well, let’s call it “not quite a Hail Mary, but close to one.”
After several funding rounds last year, Spotify is flush with cash. Several true believers ponied up capital last year, including a $100 million investment from Coca Cola and Goldman Sachs — now industry analysts speculate that the company’s worth is around $3 billion. That kind of money buys a lot of face time in Hollywood. But while the music business is tough on Spotify, what with tiny margins, it is is believed that Hollywood margins are even tighter. So how does Spotify plan to crack that nut?
They are likely going to go with original content. It’s a gamble used initially by HBO, when they switched from running films to developing fresh original content like “Dream On,” “Sex & the City” and “The Sopranos.” Netflix too has picked up on it, releasing their own series, “House of Cards,” which they believe will lure in valuable subscribers who will stay long after the series has ended.
Spotify apparently believes that it too can adopt the original content model with television and movies. And they’ve got the cash to try it, so why not? I’m not going to argue with people fighting over better ways to deliver me interesting content. My only question is: Why didn’t Spotify try and do the whole “original content thing” with the music industry first?