A senior Spotify exec has hinted the music streaming service will begin using TV ad campaigns, in a move that will come as a sharp contrast to its no-marketing policy.
When asked about how Spotify views traditional advertising, UK managing director Jon Mitchell said: “I can see ourselves using TV.” Mitchell was speaking at the ’Punching above your weight’ event, held by creative agencies Devilfish and Contagious.
Sweden-based Spotify aired a TV ad in Sweden late last year, but has not embarked on advertising campaigns outside its country of origin. The company has instead relied on word-of-mouth to bolster its profile. Mitchell says the only money Spotify initially outlaid on marketing was the buying of a ’seeding list’, a database of influential people’s contact information. It was reported in October 2009 that Spotify had spent less than £5,000 on marketing in the UK. The seeding list was used to create the invite-only service and add an air of exclusivity.
Mitchell says Spotify was growing very slowly in the UK until the tipping point came when the company was featured on BBC’s Ten O’Clock News . He revealed that after that moment “things started to snowball”.
Spotify believes simultaneously running ad-sponsored and premium versions of the service is a viable strategy. Mitchell says: “We don’t put ads on Spotify to drive [users] to premium – we try to make the free version as good as possible. We are trying to make as much money as possible for the record companies.”
The talk by Mitchell also hit out at the negative publicity Spotify has received. Commentators have accused Spotify of undermining the record industry by paying artists tiny royalties, but Mitchell claims the company has risen above the ’lies’.
“We didn’t react to negative comment,” says Mitchell. “We didn’t comment in the press to reports of us killing the record industry – there were lots of lies about how much we paid the artists.”
This story first appeared on pitch