Spotify has carved out a business for itself in music streaming, podcast entertainment and audiobooks. Now, in its ongoing efforts to get its 600 million+ users to spend more time and money on its platform, Spotify is spinning up a new line of content: e-learning.
Starting with a rollout in the U.K., Spotify is testing the waters for an online education offering of freemium video courses. Produced in partnership with third parties like the BBC and Skillshare, at least two lessons will be free, with the cost of a total course ranging from £20 to £80 on average. The prices will be the same, regardless of whether you are a basic or premium user, at least for now.
Mohit Jitani, the London-based product director for the education business, said in an interview that pricing choices were part of what it's testing before considering how to roll out more widely. "With this launch, we're trying to understand the demand first," he said. "Then we optimize how we can make it more compelling and exciting."
The content will live in both Spotify's home and browse tabs (under "Courses"), and it's accessible on the web as well as via the Spotify mobile app.
The courses are pitched somewhere between YouTube, Master Class and LinkedIn Learning: Videos in the current catalog cover a wide range of subjects, from music production through to learning how to use Excel, as well as lessons on -- you guessed it -- how to create online learning lessons to turn musicians and others into "education creators."
Unsurprising for a market estimated to have been worth more than $315 billion in 2023, there are plenty of online learning sites on the web these days, some of which have been innovators in interactive content and other media formats -- you can even find a number of startups aspiring to be the "Spotify for education" if you Google that term -- Spotify's educational push is focused around one-directional, on-demand video.
Some courses appear to have supplementary material, although that will be more in the realm of extra documents rather than tests or other interactions. Jitani declined to comment on whether Spotify would launch any kind of interaction or gamification in the future -- or, indeed, if games of any kind are on its roadmap right now.
The first partners for Courses are Skillshare (which will focus on creatives), PLAYvirtuoso (music industry courses), BBC Maestro (Master Class-esque) and Thinkific (for those inspired to build their skills into online learning classes of their own).
Spotify, Jitani said, would be looking to curate which courses it offers, and it will base curation on what people are already listening to and searching for on its platform. There appears to be no limit, though. If you look at the catalogs of these respective providers, you'll see that the topics cover a pretty wide breadth -- and bread.
"We'll learn a lot about what people are actually interested in [and] we will start getting a lot of segments around that," Jitani said. "And then we'll go and find... the best content."
Third-party publishers own the videos and license them to Spotify, but they will be hosted and purchased on Spotify itself. In terms of revenue share, the creator, publisher and Spotify will all get a share of the sales, with content partners overseeing payments to creators.
Spotify isn't specifying what kind of cut will be going to whom, nor whether it will potentially offer any kind of discount or other benefit to users who are already premium subscribers on the platform.
Why education? Why the UK?
The move points to Spotify's strategy to continue diversifying its business, while also aiming to build a path to more consistent profitability and stronger margins. It's picked the U.K. for this, Jitani said, because it's a huge market for the company and is already one of the most engaged in the world.
Financially, Spotify continues to see a lot of ups and downs in the current market. It went through three rounds of layoffs last year; and it has been unprofitable more than profitable over the years, most recently posting a net loss of $81 million in its quarterly earnings in February.
Yes, the dry realms of online learning and professional development might sound like a reach for a company still best known for music streaming, but there are three areas where it makes some sense.
With its podcasting business continuing to grow, Spotify is picking up a lot of data on what people are doing on the platform, and it's finding a close correlation between some of the most popular podcasts on Spotify and education content.
Around half of Spotify Premium subscribers have listened to education or self-help themed podcasts, Spotify says. Spotify can use the same kind of recommendation surfacing that it uses for music and podcasts to cross-promote. Think of a podcast with a "business guru" now recommending a paid course with that person. Spotify's making a bet that one will help sell the other.
Alongside this, Spotify has long been working on tools for creators to help them manage and grow their earnings. Offering educational content aimed at running a business, or improving your music production, fits with that.
Third of all, there is the video element. Spotify's been trying to get deeper into video for the better part of a decade.
That hasn't translated to being a YouTube or Netflix rival yet. Video was mentioned a grand total of one time in the company's last earning call, where CEO Daniel Ek vaguely described video podcasting as "growing in a healthy way." But it launched music videos in select markets earlier this month, and now we have an earnest effort in educational videos. It may find its groove yet.
