The company is currently trialing this new feature in Australia, which is a big step up from the way the current free tier works. In its current iteration, free tier listeners [understandably] are unable to skip commercials. After all, Spotify needs users to listen to/watch those commercials to help pay the bills.
But with its new feature trial, which is dubbed "Active Media", customers will able to skip over ads whenever they want. Unlimited ad skips may seem like a disaster for a company that is banking on ad revenue from free tier customers, but Spotify has a strategy for this move.
"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," said Danielle Lee, Spotify's global head of partner solutions, in an interview with Ad Age.
With Active Media, Spotify's advertisers won't actually have to pay for the ads that customers skip; they will simply pay for the ones that customers choose to watch or listen to in their entirety. If this means that advertisers have to get more creative to capture the attention of listeners, so be it. A "dry" commercial is sure to get a hard pass from the Spotify crowd.
When asked if Spotify planned to expand Active Media beyond its Australian trial, a company spokesperson told Gizmodo that it "Will consider expanding to additional markets in the future. We are committed to our freemium model and will continue innovating our products to ensure the best experience on both our free and premium tiers.”
While Spotify is taking steps to make its free tier more appealing, the end goal is to get customers to upgrade to the paid service, which is ad-free and costs $9.99/month.