Spotify has revealed plans to add sponsored apps from companies like AT&T, McDonald’s, Intel and Reebok. The music-streaming service will be making the move to help pay for its significant licensing costs (around $300 million) and better curate its significant library of 16 million songs.
Spotify indicates that it has over 10 million active free listeners on the ad supported service. The number of people who pay a fee ($9.99 per month) for ad-free music is in the 3 million range.
Apps have been part of Spotify since late 2011. Spotfiy has so far concentrated on music publishers such as Rolling Stone, Pitchfork and Billboard organizing the site’s music library. AT&T’s “Surround Sounds,” will plots songs to the locations where they were written, recorded, played or performed, allowing users to find music by searching maps, Reebok’s app creates workout playlists, and Intel’s “Sifter” recommends songs, bands and artists based on what users’ Facebook friends are listening to.
Spotify clearly wants something like the Facebook effect, where it’s free for a company to set up its own page, but they often pay for ads as well. “Brands will build these apps and they’ll spend their marketing dollars to promote them on and off Spotify,” said Spotify Chief Marketing Solutions Officer Jeff Levick.
Spotify hopes that these promoted brand apps will help make the service attractive to larger audiences in the U.S. Intel will promote its app with ads on both Spotify and other digital channels, launching late this month and eventually with cross promotion on Intel’s Facebook.
Source: AdAge
