As part of a broader effort to diversify its revenue streams outside of streaming, Spotify is now selling beauty products through its partnership with Merchbar
Spotify, the $16 billion digital music “startup” that is hotly tipped for an IPO, continues to lay the groundwork to diversify its platform beyond basic streaming.
Context & Ripple Effects
This 2017 move is the earliest data point in what became Spotify's standing playbook: with an IPO looming and streaming economics thin, the company began treating artist profiles as retail surface area, starting with beauty products sold through its Merchbar partnership. At the time, commerce was an experiment bolted onto a streaming service valued around $16 billion.
The pattern held and hardened over the following years. By 2019 Spotify was buying marketplaces outright, including the SoundBetter production marketplace, and by late 2021 it had productized the merch idea into a formal Shopify partnership with tiered pricing from $29 to $299 per month across five countries. The 2017 beauty experiment looks, in hindsight, like the proof-of-concept for that later infrastructure.
First-order effects
- Spotify gains a commission-bearing revenue line that requires no new content licensing — every beauty sale through Merchbar monetizes attention the streaming subscription already captured.
- Artists and Merchbar get a new storefront inside Spotify's app, extending Merchbar's reach beyond its own site at no acquisition cost to Spotify.
Second-order effects
- Once commerce proved out on profiles, Spotify had the internal case to formalize it — which is exactly what the later Shopify integration did, turning an ad-hoc partnership into a paid, tiered product for artists.
- Marketplace acquisitions like SoundBetter followed the same logic: buy the connective tissue between creators and buyers rather than build it, stacking take-rate businesses alongside streaming.
Third-order effects
- If the pattern holds, streaming platforms converge on a two-engine structure — subscriptions for scale, marketplace take rates for margin — where the profile page becomes contested retail space and whoever controls the surface captures the commerce.
- That shift raises the bar for rivals without commerce rails: a pure-play streamer competes against platforms whose per-user economics improve with every non-music transaction.
The trend: Streaming services are evolving from subscription content pipes into creator-commerce platforms, using artist profiles as retail surface area to escape the margin ceiling of music licensing.