Spotify’s Bet Big on Podcasts Hitting Jackpot
They say talk is cheap, but … man! … does it ever make money!
On Wednesday, Spotify reported that its advertising revenue was up 75% from a year ago. Driving the surge is two years of investments in podcasting, once the province of basement-dwelling radio nerds that is now among the hottest commodities in the content world.
No Fear Factor
Its core business remains a huge library of streamable music that includes such superstars as the freewheelin’ Bob Dylan and certified lover boy Drake, but Spotify has also spared no expense building a stable of guitar-less talking heads. The Swedish company binged on true-crime studio Parcast for $56 million and narrative podcast network Gimlet for $200 million in 2019. Last year, it coughed up $196 million for former ESPN columnist Bill Simmons’ The Ringer network.
Spotify also inked giant talent deals, first paying former Fear Factor host and Elon Musk toke buddy Joe Rogan $100 million for exclusive rights to his Joe Rogan Experience. Next, it poached the comedy podcast Call Her Daddy from Barstool Sports for $60 million. And all the chatter is paying off:
- Advertising, which previously was about 10% of revenue and is linked to Spotify’s podcast business (What? You haven’t joined the Dollar Shave Club?) now makes up about 13% of revenue at €323 million.
- The company’s revenue grew 27 percent this year to €2.5 billion thanks to its 172 million paid subscribers and 381 million monthly active users — up 19% from a year ago.
All Ears: Insider Intelligence predicts the number of monthly US podcast listeners will grow 10% this year to 118 million — more than 60% of 18- to 34-year-olds already listen monthly.
Taking it to 11: Rivals Amazon Music and Apple Music don’t release user numbers, but the research firm Music Ally estimates they each have about 55- and 60-million paid subscribers — a far cry from Spotify’s
more than 177 million premium listeners.