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…

Jennifer
Image Credit: iStock Images, Bence Bezeredy
Sign up for insightful business news.

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.

Analysis more

Tale of the Tape: Warren Buffett and Cathie Wood

Farm Strong: Understanding Agriculture as an Investment

Recent News

Fandom Nabs TV Guide and Metacritic in Media Merger

Google Drops Translate App in China

Liz Truss Pulls Screeching U-turn on Plans to Cut Taxes for Britain’s Wealthiest

A Strong Dollar Could Save a Horrid M&A Environment

[subscribe-form listid="1ebbb697aaa44fb1971fe0a3c42ff841" source="organic" medium="organic" redirect-url="https://thedailyupside.com/thank-you/"]
<form action="" class="subscribe-form "> <input type="text" name="subscribe_form_email" placeholder="Enter your email"> <input type="text" name="subscribe_form_name" placeholder="Enter your name" value="" class="c-subscribe-from_field"> <button class="c-btn" id="subscribe-form-submit" type="submit">Subscribe</button> <div class="subscribe-form-message"></div> <div class="subscribe-form-vars"> <input type="hidden" class="subscribe-form-param" name="params[listid]" value="1ebbb697aaa44fb1971fe0a3c42ff841"> <input type="hidden" class="subscribe-form-param" name="params[source]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[medium]" value="organic"> <input type="hidden" class="subscribe-form-param" name="params[redirect_url]" value="https://thedailyupside.com/thank-you/"> </div> </form>