As Clubhouse continues to grow, speculation has grown regarding how Spotify might get involved with the audio-chat app. Spotify is known for music streaming however, it has recently started to shift its marketing efforts to try to get users to think of Spotify as a “listening” app. Meanwhile, Clubhouse has skyrocketed in the listening business and has made podcasts interactive. If Spotify can collaborate with Clubhouse it would increase their brand image as a listening app.
What Spotify Is Trying To Do And Why
The days of listening to talk radio in the car are fading. People now connect their smartphones to their stereo systems and listen to music, podcasts, or audiobooks during their morning commute (or from home). However, Spotify had been branded as a music streaming app. The majority of users downloaded Spotify for music and music only. However, Spotify offers a variety of listening options and wants to expand its brand to become notorious for these.
Spotify: The Opening Act
To solve the branding dilemma, Spotify reached out to the youth. Spotify created The Opening Act, a problem-solving project for students who attend Historically Black Colleges & Universities and Hispanic Serving Institutions. The Opening Act presents students with business problems and gives them the opportunity to solve them to secure a Spotify internship. The Advertising and Sales problem that Spotify gave to students is regarding the Spotify brand. In order to change from “a music streaming app” to a “listening app”, Spotify’s marketing strategy needs to change. Essentially, Spotify is actively seeking a solution to keep up with Clubhouse.
Spotify For Listening vs. Clubhouse For Interacting
Spotify is trying to brand themselves as being on the “same side” as podcasters, similar to their relationship with musicians. However, Spotify makes all their money off musicians, and musicians use Spotify to essentially promote their music because they make most of their money on tour. For podcasters, income comes solely from their podcast (for most- some do influencing and promotions). Therefore, podcasters are going to have a higher expectation for revenue. In contrast, Clubhouse does not pay a cent for its content. People join on their own and choose what topics to discuss. Even the users that host regular rooms are not getting paid. And yet, the app continues to grow.
How This Relates To Clubhouse
Clubhouse has the podcast spotlight Spotify wants. Clubhouse has been trending for months now with regard to its booming popularity among listening/podcasts fans. How great is the idea of an interactive podcast? There is a plethora of different topics and discussions constantly taking place on the app, and in a COVID-19 world, it makes conversation possible. Spotify CEO Daniel Ek even admitted in an interview with Verge that his company was keeping an eye on Clubhouse. EK goes on to compare the two apps saying, “…but I suspect that from the consumption perspective, most of the time consumed will still be on-demand which is what Spotify is known for today”. With this being said, it is clear that the two are considered competitors.
So what will become of this? We think Spotify will try to get involved with Clubhouse either through similar content or collaboration. For example, maybe Clubhouse starts recording podcasts on select topics and lets Spotify post them on their app. Or, Spotify might instill interactive features or listening parties. Spotify could start by giving creators options to modify their content, then shift to more interactive listening. Spotify already lets users see what their friends are listening to, so why not let them join in on each other’s podcasts too?
Regardless of how Spotify chooses to pivot, they need to shift their brand image. It is not going to be an easy task to switch from a music app to a listening one. We suggest Spotify takes a few tips from PPL Labs.