Spotify has begun a test for select users in Australia, allowing free tier listeners to skip "any" audio and video ads that they come across "as often as they want," according to a new report by Ad Age. Currently, users who don't pay for a Spotify Premium subscription ($9.99/month) have to listen to ads and can't skip them.
Spotify's head of partner solutions, Danielle Lee, explained that unlimited ad skipping is something the company is interested in because it will allow users to hear or watch only the ads they are interested in. As such, Spotify will know which ads each user lets play to the end, "informing Spotify about their preferences in the process" and tailoring the ads to their liking.
The company calls this "Active Media," and ensures advertisers won't have to pay for any ads that are skipped, suggesting Spotify is confident it will learn and create enough compelling ads that free tier users won't want to skip. According to Lee, Spotify's hope is to debut Active Media on a global scale, but at this time the Australia-based testing is only one month old.
"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," Lee says. "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."
In comparison, Apple Music doesn't offer a free tier for its service, instead gifting new subscribers a three month free trial of the streaming service. In an interview from May 2017, former Apple Music executive Jimmy Iovine stated that if Apple Music did have a free tier it "would have 400 million people on it" and easily eclipse Spotify, but that's not what the company wanted for the service.
Instead, Apple built Apple Music as a "special experience" for "people who are paying," with no ads anywhere on the service. Apple Music and Spotify have been rivals since the former service debuted in 2015, and in a more recent interview Apple CEO Tim Cook said that he "worries about the humanity being drained out of music," alluding to Spotify's more algorithmic approach to suggesting new music to its users.
For Spotify, the company is now trying to boost free tier users in a number of ways, and eventually convince those users to pay for Spotify Premium. The company expanded the free tier with on-demand playlists in the spring, letting those listeners pick and choose which music they want to listen to as long as the tracks appear in one of 15 curated discovery playlists. This is an upgrade from the previous way free tier listeners heard music, which was simply shuffling songs at random.
Secondly, in a major announcement during Samsung's Galaxy Note 9 presentation yesterday, it was revealed that the Spotify app will now come pre-installed on all Samsung smartphones. Because of this, many Android users will now find it easier to jump into Spotify and begin streaming their music on that service, instead of searching for the Android-based Apple Music app.
As of the last count in July 2018, Spotify has 83 million paid subscribers globally and 180 million total monthly active users if you count the free tier. Apple Music was last counted to have about 40 million subscribers, although Apple's service could have more paid users than Spotify in the United States.