Spotify has acquired MightyTV, a New York-based startup that uses AI to provide video recommendations based on personal preferences and opinions of friends. Terms of the deal were not disclosed.
MightyTV was founded in 2015 by Brian Adams (not Bryan Adams), the founder of adtech company Admeld, which he sold to Google in 2011. Adams later worked on the Google Doubleclick Publisher platform before leaving to start MightyTV four years later.
As a result of this acquisition, MightyTV is being shuttered with immediate effect, which essentially means this deal was more of an acqui-hire than anything else. Indeed, the MightyTV team will be joining Spotify, and Adams will serve as Spotify’s new VP of technology, with a specific focus on “advertising and marketing technology solutions,” according to a statement issued by Spotify. Adams will be using his “vast knowledge of programmatic advertising and personalized recommendations” to turbocharge the company’s own advertising products.
“The content recommendation system MightyTV has built is incredibly aligned with how we think about advertising technology and marketing personalization,” said Jason Richman, VP of product at Spotify, in a press release. “Brian and his team will help us continue to innovate on free monetization and extend our leadership position in programmatic audio.”
MightyTV is the latest in a line of strategic acquisitions by Spotify. Earlier this month, it snapped up Sonalytic, a London-based company specializing in music discovery and identification, while back in November Spotify bought Preact, a startup that helps companies acquire and retain subscribers.
Spotify has now made nine known acquisitions, a move that started with music discovery service Tunigo in 2013 and was followed by the Echo Nest in 2014 — the latter of these deals has proven to be a key tool in Spotify’s music-recommendation arsenal. Early last year, Spotify acquired CrowdAlbum, a service that aggregates photos and videos from artists’ live shows — this was the company’s first acquisition since raising a new $1 billion war chest.
Spotify recently passed 50 million paid subscribers, and the company is expected to aim for an IPO sometime in 2018. As Spotify gears up to go public, reports emerged earlier this month that the music streaming giant is considering putting more limits in place for the free service. If reports are accurate, Spotify is seeking to cut the fees it pays artists and labels for songs and in exchange make some album releases exclusive to Spotify Premium.
If Spotify is to go public, it wants to present a robust moneymaking business — and that’s what all these latest acquisitions are about. Spotify wants to differentiate itself from the competition by providing the best music recommendations and to further boost its numbers by teasing new users on board via the free tier and then enticing them to sign up for a premium subscription.
But it’s clear that not everyone will sign up for a paid streaming plan, which is why Spotify wants to monetize the free users as effectively as possible. And that’s why the MightyTV acquisition came to fruition — it’s all about improving the Spotify advertising machine.