Spotify will start paying video creators to compete with YouTube.

Spotify has decided to intensify its focus on video content. In a move that will impact creators, the company will start compensating them based on the level of engagement their videos generate among paying subscribers. Additionally, in order to encourage the consumption of this type of content, automated ads will be removed from videos for paying subscribers. These changes will be implemented starting January 2, 2025, in the United States, United Kingdom, Australia, and Canada.

By opting to pay video creators directly based on their engagement, Spotify positions itself in direct competition with YouTube, which is also expanding its podcast offerings and already distributes billions of dollars annually in advertising revenue among its creators. During a creator-focused event in Los Angeles, Spotify CEO Daniel Ek commented, "We can offer an experience for your audience that is superior to any other platform."

Since Spotify revamped its approach to video podcasts in 2022, consumption of this format has experienced exponential growth, with the number of video creators on the platform more than doubling annually. There are currently over 300,000 video podcasts on Spotify, a significant increase from the 250,000 recorded at the end of June. According to the company's spokesperson, Grey Munford, "video consumption hours have grown faster than audio-only consumption hours."

Creators will have access to their payment details through a tool called Spotify for Creators, which will also allow them to verify their eligibility for video payments and provide more advanced analytics, along with the option to upload short video clips in vertical format. However, uncertainty remains regarding the amount Spotify plans to pay its video creators. The company has yet to clarify how these payments will be calculated, although Munford indicated that creators will be able to view breakdowns in the mentioned tool.

For his part, Gustav Söderström, co-president of Spotify, stated, "it's a consumption-based model and it is competitive with what they are already doing today." This suggests that compensation could be comparable to what creators receive on other platforms, aiming to make the system attractive to them.