Spotify's new course platform is promoting expensive classes covering everything from dogs to startups. hobo_018—Getty Images
You may have subscribed to Spotify to listen to Joe Rogan's hit podcast before shelling out your pocket change to access audiobooks from the platform. The music streaming giant is now betting that people will want to splurge on expensive learning courses in everything from building a startup to becoming a DJ.
Spotify has launched learning courses on its platform on a trial basis in the UK as part of its latest strategy to diversify beyond music streaming.
The course seems to be inspired by masterclasses where celebrities reveal industry secrets and video learning platforms like EdEx, LinkedIn Learning, and Udemy.
CEO diary Presenter Stephen Bartlett will lead a course on starting and growing a 'multi-million pound business'. Meanwhile, Take That singer Gary Barlow is hosting a 29-lesson course on songwriting.
Both courses cost a hefty £48.90 ($61.81).
However, these amounts seem like a relative bargain when compared to the price of music lessons. Introductory piano and acoustic guitar course costs £92.90 ($117.44).
The list of courses gets more and more bizarre as you progress. Users can pay £35 ($44) to attend a class on dog body language, or pay a hefty £71.90 ($90.85) to teach their dog how to find its antlers during shedding season. You can also do it. The latter course takes just 30 minutes.
The courses operate on a “freemium” model, where the first few classes of each course are offered for free, after which users must cough up to take the remaining classes.
How Spotify structures payments for these courses, such as whether it operates a revenue-sharing model with creators or pays certain prominent creators an upfront fee to produce content, remains to be seen. It's not clear.
Spotify's latest revenue plan
The move to video courses is the latest sign that Spotify is diversifying its services beyond its low-margin music streaming business, which pays record labels billions in music licensing fees.
Spotify first diversified into podcasting, paying billions for exclusive shows with Joe Rogan, Barack and Michelle Obama, and Prince Harry and Meghan Markle.
However, the group has experienced major pain in that department and has since parted ways with its expensive star while maintaining an exclusive contract with Logan.
Spotify has argued that this was part of its strategy to bring in listeners not previously on the platform, rather than the most lucrative model, and CEO Daniel Ek expects the podcast division to turn a profit this year.
The company is also focused on audiobooks, offering a similar freemium model where some audiobooks are offered for free in addition to a premium subscription, while others are paid.
Spotify believes the number of users engaging with learning-focused podcasts and audiobooks means the market is ripe for growth.
“Many of our users routinely use podcasts and audiobooks for their learning needs. This engaged community is passionate about accessing and purchasing quality content from video course creators. We believe there is interest,” said Babar Zafar, vice president of product development at the company. Spotify.
Apple's predicament
Music streamers have historically faced problems marketing these paid add-on features on their apps thanks to Apple's fees, which have been embroiled in years-long regulatory battles.
Spotify has avoided giving users the option to pay for subscriptions or make in-app purchases in its iOS app to avoid paying Apple a 30% fee on purchases. Instead, the customer had to follow the streaming platform's instructions to be redirected to her web browser.
This is set to change in the EU following the Digital Markets Act (DMA), which will see Spotify restructure its app to make it easier to sell add-on features to users.
Daniel Ek said there was a “huge advantage” for the group thanks to its enhanced ability to sell its capabilities directly to customers through the app.
