Spotify already dominates the free music streaming market and is now considering entering the video streaming market.

The current market for video streaming is filled with many new services. This is fantastic news for series binging consumers, the owners of video entertainment companies and producers. However this new trend may eventually bring down the video streaming distributors as they might find themselves paying increasingly escalated prices for exclusive video content in a seller’s market. The subscription music streaming service Spotify is one of the newest well paid players that could wade into digital video. The Wall Street Journal has reported recently that Spotify is in negotiations with online video and traditional media companies to start a video web hub. The Journal added that this move “may put growth ahead of profit.”

The current video wars are perceived as being between streamers like Netfix, Amazon.com and YouTube against entrenched pay TV bundlers such as Comcast or CBS although now the boundaries that used to separate these businesses are disappearing quickly while the competition between the unbundled video streaming has become very harsh and intense also. This is probably best noticeable with the example of Hulu, which is a subscription video service that is owned by Comcast, Twenty First Century Fox and Disney. Once Hulu was just a repository of back episodes of network TV series’, however it has seen great growth in the number of viewers and because of this it has become a force when it comes to aggressive bidding for exclusive content. The service has been able to attract huge attention from the public as it reportedly paid 160 million dollars for all 180 episodes of the sitcom Seinfield. One of the media analysts who has talked about this deal with people from the industry at an online media Newfronts advertiser showcase has stated that some of them were “sticker shocked” by the price Hulu agreed to pay for the show.

The economics of the market of videos is like this: all people have a limited amount of time to watch videos daily. If the industry wants to grow in aggregate, the customers must start spending more time in front of the screen during their day, either that or they must start subscribing to multiple services in order to guarantee themselves rich viewing options during every moment of the day. But the problem is combining this with the monthly cost of broadband it can become very expensive for consumers.