Spotify tries to go mainstream, launches splashy ad campaign
The music service will launch its first ever ad campaign tonight as it tries to speed up growth in the U.S.
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Paul Sloan is editor in chief of CNET News. Before joining CNET, he had been a San Francisco-based correspondent for Fortune magazine, an editor at large for Business 2.0 magazine, and a senior producer for CNN. When his fingers aren't on a keyboard, they're usually on a guitar. Email him here.
Spotify today is rolling out a major advertising blitz, including a series of TV spots as the company hopes to reach a mass audience in the U.S. The campaign, called "For Music" and created by Droga5, will debut tonight during NBC's "The Voice" and will have Web and social media components.
Spotify's push comes at an important juncture for the company, which now has 24 million active users and 6 million paid subscribers. Spotify, which offers both on-demand music and Internet radio, said in December that it had passed 1 million paid subscribers in the U.S. after less than a year and a half in the market. While that's impressive in the streaming music business -- it took rival Rhapsody more than a decade to hit 1 million subscribers -- it's still small, and it underscores how hard it is for a standalone, digital music company to gain a mass audience in the U.S.
Execs at the major music labels privately complain that Spotify hasn't done enough to build its U.S. audience.
This ad blitz is Spotify trying to fix that. It also comes as Spotify is renegotiating its licensing deals with the major labels, according to music industry executives.
Spotify's model is to lure consumers to the free, ad-supported service and then try to get them to become paying subscribers by offering ad-free music and more features, such as the ability to listen to your music offline and on the your phone. The company is doing a good job of converting freeloaders, which is why it's so important that it lures more free users in general.