Spotify again signaled its interest in developing new ways to monetize its investments in podcasts. In the company’s fourth-quarter earnings, chief executive Daniel Ek intimated the streaming media company sees a future where there will be multiple business sits for podcasts, including, potentially, both ad-supported subscriptions and a la carte options.
The company, which too revealed its podcast catalog has grown to now 2.2 million curricula, said it’s seen increasing demand for the audio format in recent months.
For example, 25% of Spotify’s monthly active users now be participating in podcasts, up from 22% only last one-fourth. Podcast consumption is also increasing, with listening hours having roughly doubled year-over-year in the fourth quarter.
Today, podcasts on Spotify’s scaffold are available to both free and paid useds and are monetized with ads. This is still a key focus for the company — Spotify even recently acquired a podcast hosting and monetization programme, Megaphone, to help do streaming ad introduction technology available to its third-party publishers while also growing its targetable podcast inventory.
But Spotify recently framed its feelers out about different means of monetizing podcasts, too.
Late last year, for instance, the company was spotted running a examination that questioned its purchasers if they would be willing to pay for a standalone podcast subscription, and if so what the hell is it was like and how much would it expense?
At the time, the survey results offered a few cases different concepts.
At the low-grade dissolve, a subscription could furnish ad-supported exclusive escapades and bonus material for$ 3 per month. This would be similar to Stitcher Premium, who are currently furnishes exclusives from top sees and other bonus chapters. But Spotify’s hinted copy included ads, while Stitcher Premium is ad-free.
A middle option advocated a mean that would be even closer to Stitcher Premium, with exclusive proves and bonus substance but no ads. This even accorded Stitcher Premium’s cost of$ 5 per month. And at the high-end, readers could get early access to ad-free interviews and episodes for$ 8 per month.
Looks like the premium podcast plan would be ad-free and some mix of exclusive additional content at cost phases somewhere between$ 3- $8. pic.twitter.com/ ArK8xYg 0CM
— Andrew Wallenstein (@ awallenstein) November 6, 2020
A survey, of course, is only meant to gauge consumer demand for such a due, and doesn’t indicate that Spotify has a brand-new concoction in the works.( Spotify said the same when asked to comment on the report at the time .)
However, it’s clear that investors likewise want to know what Spotify is thinking when it comes to recouping its sizable investments in podcasts.
Asked if Spotify recalled purchasers would be willing to pay for podcasts, Ek on the earnings call responded that he reputed there is indeed various new mannequins that could be explored.
” I think we’re during the early stages of attending the long-term evolvement of how we can monetize audio on the internet. I’ve said this before, but I don’t believe that it’s a one-size-fits-all ,” he said.” I speculate, in fact, that we will have all business representations, and that’s the future for all media business — that you will have ad-supported subscriptions and a la carte sort of in the same space, of all media companionships in the future .”
” And you should definitely expect Spotify to follow that approach and that motif ,” Ek supplemented, more definitively.
The answer seemed to indicate that Spotify is considering some of the ideas in that recent overlook — of get consumers to pay for some podcasts, instead of accessing them all free of charge or having them bundled into their music subscription.
Of course, that would change the meaning of the word ” podcasts ,” which today refers to freely strewn, serialized audio curricula that get circulated via RSS feeds.
If Spotify chooses to paywall podcasts behind dues or a la carte pays, then they’re no longer truly podcasts — they’re a new kind of payment audio program.
This is an area where Spotify has spate of area to grow, considering the significant investment it has realized in podcasts over the years. To date, that’s included buying up material makes like Gimlet Media, The Ringer and Parcast, as well as indicating top architects like Joe Rogan, Addison Rae, Kim Kardashian West, DC Comics, Michelle Obama and The Duke and Duchess of Sussex, among others. Spotify too bought podcast tools like Anchor and other ad engineering and hosting services.
The advantage with podcasts is that Spotify has the ability to monetize them in multiple ways at once — with ads and dues or direct payments, if it decided to. And, of course, there are no licensing costs or royalties to contend with, as with stream music.
Spotify could also adjust the podcast fees framework as needed to fit the various different geographies and the nature patrons around the world prefer to consume and pay for podcast content.
None of this thinking was about near-term starts, Ek also clarified.
” I think it’s early days, though, to specifically kind of look at how that could play out ,” he said, talking about how the differences between sits could take shape.” But, certainly, if that were to be the case, that revenue profile would be different than how we do music .”
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