Spotify tests skippable ads for free listeners in Australia
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.
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.