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The tuition for Spotify University could be the latest way the streamer gets as much money as it can from its users.
What happened: Spotify is testing the waters for educational video courses on its platform, giving users in the U.K. lessons from BBC Maestro, Skillshare, and Thinkific, as well as music lesson website PlayVirtuoso.
Catch-up: This is the latest experiment by Spotify to grow its content beyond just streaming songs. Earlier this month, the platform began testing full-length music videos, and it has released marketing tools that let authors direct fans to audiobooks on the platform.
- While Spotify has cut some in-house podcasts, it has also refocused efforts on its top performers, renewing contracts for hosts like Joe Rogan.
Why it matters: Video courses are not just about expanding Spotify’s user base — they’re also squeezing more revenue out of its existing one. The first two classes in a course are free, but users have to pay to access the whole thing, even if they’re a Premium subscriber.
Zoom out: Raising the prices on Premium memberships bumped Spotify’s average revenue per user (ARPU) up by 5% last quarter. But there’s only so many times it can do that before users get mad, so it is looking for more charges to tack on to the membership cost.
- For example, Premium users get 15 hours of audiobook listening a month before having to either buy the audiobook or a 10-hour “top-up.”
- Spotify has said that growing ARPU is a priority in some markets. Further monetizing existing members could be the easier path to more revenue in places where user growth is close to topping out.
What’s next: Video classes could bring non-audiophiles to Spotify’s rumoured “Supremium” tier, which would include a long-awaited hi-fi audio offering, as well as extra playlist-mixing tools, listening stats, and audiobook time.