Spotify tests skippable ads for free listeners in Australia

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In a move that could eventually lure new subscribers away from Apple Music, Spotify is now testing skippable ads for its free ad-based tier.

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Testing of "Active Media" is currently limited to Australia, Spotify explained to Ad Age. People enrolled in the test, however, can skip both audio and video ads at any time. Normally the only way of avoiding ads is by paying for Spotify Premium.

While the concept might initially sound counterintuitive, potentially killing off a source of income, Spotify's head of partner solutions, Danielle Lee, suggests that the company is looking refine the ads people are exposed to.

"Our hypothesis is if we can use this to fuel our streaming intelligence, and deliver a more personalized experience and a more engaging audience to our advertisers, it will improve the outcomes that we can deliver for brands," she said. "Just as we create these personalized experiences like Discover Weekly, and the magic that brings to our consumers, we want to inject that concept into the advertising experience."

The concept has the support of at least one major advertiser, Dollar Shave Club. "As an advertiser, I love it. As a user, I love it, too," said the company's VP of media and acquisitions, Sam Kang.

Apple Music recently overtook Spotify in the U.S. in terms of paid subscribers, but in July Spotify noted that it had 180 million active users worldwide, over 101 million of them ad-based -- the latter figure is over twice Apple Music's last reported listenership. There is no free version of Apple Music beyond a three-month trial.

Skippable ads could potentially keep the ball in Spotify's court, especially since the company's ad revenues were up 20 percent in the second quarter.

Comments

  • Reply 1 of 13
    Rayz2016Rayz2016 Posts: 3,926member
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    edited August 10 ericthehalfbee
  • Reply 2 of 13
    linkmanlinkman Posts: 809member
    Rayz2016 said:
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    If you skip the ads then they will be embedded in the music? It's like when TV shows tout "no commercial interruptions" but they put an ad on half the screen or have prominent product placement in the content.
  • Reply 3 of 13
    Rayz2016Rayz2016 Posts: 3,926member
    linkman said:
    Rayz2016 said:
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    If you skip the ads then they will be embedded in the music? It's like when TV shows tout "no commercial interruptions" but they put an ad on half the screen or have prominent product placement in the content.
    So while you’re listening to “Animal” by Def Leppard, there’s an ad for Winalot dog biscuits playing quietly at the same time?

  • Reply 4 of 13
    tmaytmay Posts: 2,862member
    This reminds me of MoviePass pushing an all you can eat service to people that absolutely love to eat! Reality has not been kind to that business model, nor will this be for Spotify.
    racerhomie3watto_cobra
  • Reply 5 of 13
    So a company that's losing money because of their free ad-supported tier is now going to allow those free users the ability to skip ads?

    Sounds brilliant to me.
    watto_cobra
  • Reply 6 of 13
    Rayz2016 said:
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    I'm guessing the thought might be if you're listening to music in the background while you're doing something else, you might not jump to skip every time a commercial comes on... maybe just the really obnoxious ones. The goal is to tune your ad preference like it does the music. It would be funny if the Skip did a skip to the next ad!
  • Reply 7 of 13
    anomeanome Posts: 1,033member
    Not even this is getting me to re-sign up to Spotify.
    watto_cobra
  • Reply 8 of 13
    claire1claire1 Posts: 194unconfirmed, member
    Rayz2016 said:
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    I'm guessing the thought might be if you're listening to music in the background while you're doing something else, you might not jump to skip every time a commercial comes on... maybe just the really obnoxious ones. The goal is to tune your ad preference like it does the music. It would be funny if the Skip did a skip to the next ad!
    Sometimes when people listen to the radio they drown out the sound and then remember they're blasting a commercial. I'm guessing they hope people forget to skip, kinda  like youtube ads.
  • Reply 9 of 13
    Personal Anecdote: I listen to podcasts and I always have an option to skip the copy reads. Sometimes I do and sometimes I don’t, depending on my task and mood. I suspect Spotify customers will act the same. Skipping every ad sounds like work.  
    watto_cobra
  • Reply 10 of 13
    linkmanlinkman Posts: 809member
    Rayz2016 said:
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    I'm guessing the thought might be if you're listening to music in the background while you're doing something else, you might not jump to skip every time a commercial comes on... maybe just the really obnoxious ones. The goal is to tune your ad preference like it does the music. It would be funny if the Skip did a skip to the next ad!
    After reading the 9 to 5 Mac article on this subject it indeed appears that the listener skips to another ad; keep skipping until you get to one you like or are tired of skipping. The thought is that Spotify can charge more for better targeted ads and won't have to present as many ads (yeah, right), thus leading to better consumer satisfaction. I think if Spotify gets better ad revenue they'll keep just as many running and maybe not be as much in the hole in the financial sector.
    adm1
  • Reply 11 of 13
    Rayz2016Rayz2016 Posts: 3,926member
    linkman said:
    Rayz2016 said:
     But given the choice, won’t everybody just skip the ads? I might be missing something here. 
    I'm guessing the thought might be if you're listening to music in the background while you're doing something else, you might not jump to skip every time a commercial comes on... maybe just the really obnoxious ones. The goal is to tune your ad preference like it does the music. It would be funny if the Skip did a skip to the next ad!
    After reading the 9 to 5 Mac article on this subject it indeed appears that the listener skips to another ad; keep skipping until you get to one you like or are tired of skipping. The thought is that Spotify can charge more for better targeted ads and won't have to present as many ads (yeah, right), thus leading to better consumer satisfaction. I think if Spotify gets better ad revenue they'll keep just as many running and maybe not be as much in the hole in the financial sector.
    Right. Thanks for that. I shoud’ve got it straight from the horse mouth instead of trying to make sense of it from a blog piece written second-hand. 
    adm1
  • Reply 12 of 13
    Still won't make any difference. Spotify. Tidal. They're all pending failures in streaming anyway.
  • Reply 13 of 13
    Rayz2016Rayz2016 Posts: 3,926member
    Still won't make any difference. Spotify. Tidal. They're all pending failures in streaming anyway.
    They can still survive, but streaming alone won’t do it. 

    They need original content and exclusive services. Pay artists to do interviews and concerts. 
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