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Has Spotify Found A New Revenue Sweet Spot?

Spotify and BandPage band together to sell experiences and merchandise to fans, which means more money to artists.

Has Spotify Found A New Revenue Sweet Spot?

[Image: Flickr user Fotografien]

In a digital era where musicians are struggling to find ways to make money, Spotify and BandPage may have a solution that satisfies both artists and fans: selling merchandise and VIP experiences directly on the music-streaming service.

Spotify, rumored to be on the IPO track, previously sold basic merchandise through its site, but the partnership with BandPage will expand those offerings. Fans will be able to buy access to events and merchandise, such as private online concerts, props from music videos, and tickets to preshow soundcheck parties. By incorporating these perks into the Spotify experience, the companies hope to grab the attention (and money) of its 40 million users by showcasing these offers while they are listening to an artist’s music. Spotify isn't the only music service with its eye on merch: Before Apple's purchase of Beats for $3 billion, the music service acquired Topspin, which sells tickets, merchandise, and other products on music-streaming sites.

Stars like Thom Yorke have publicly criticized and removed their songs from Spotify because they say the platform does not fairly compensate musicians—especially new artists. This partnership is likely part of a strategy to allay those concerns and generate more revenue for artists. When the collaboration launched Wednesday, musicians Miranda Lambert, Porter Robinson, the Stone Foxes, and Ariana Grande were already selling special offers through the platform.

"At BandPage, we’ve seen bands increase their net revenue by as much as 25% by adding experiences like VIP backstage passes, online concerts, custom recordings and more. And fans absolutely love the opportunity to connect with their favourite artists in this way," BandPage CEO J Sider told The Guardian.