Spotify for Brands, the advertising side of the music streaming service (and one of the ways it generates revenue outside of paid subscriptions), is rolling out two new video ad units that will be seen by non-paying Spotify users.
The first, mobile-only format, lets Spotify Free users opt in to watch a brand-sponsored 15 to 30 second video spot — dubbed a “Sponsored Session” — in exchange for 30 minutes of uninterrupted, ad-free music. Right now, non-paying Spotify users, of which the company counts over 30 million — compared to 10 million who pay a monthly fee for an ad-free, premium version of the service — have their music interrupted with audio ads, akin to commercial ad-supported radio. This can be pretty annoying from a listener’s point-of-view, but is essential if Spotify is able to sustain offering free music streaming.
To that end, the new Sponsored Session ad unit not only offers a nice way for brands to tap into Spotify’s highly engaged audience — the company reckons its average user spends 146 minutes listening to music on the service every day (though, presumably, this includes Premium users too) — but also offers non-paying users a way to temporarily make the ad-supported version of the service less annoying in exchange for an upfront investment of their attention. How well that proposition sticks will no doubt depend on the types of brands that take up the new ad unit and how well those ads are targeted to Spotify’s freeloading listeners.
The second video ad offering, targeting desktop users only, sees brands able to sponsor a video ad break on desktop with what Spotify is calling a “Video Takeover”. This is basically a video ad that interrupts the listening experience and is designed to work much like Spotify’s existing audio ads but using video.
Meanwhile, in a blog post announcing the new video ads, Spotify says launch partners for the new formats include Coca-Cola, Ford, McDonald’s, NBC Universal Pictures, Kraft/Mondelez, Nike, Sprint, Target and Wells Fargo.