More podcasts, more listeners, more revenue, says Spotify

Spotify claims it's got more podcasts and is used by more people than Apple, and shows significant revenue growth
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  • Spotify released its Q3/21 results. We have analysis below; but in the investor call, we learnt:

    • It has 3.2m podcasts in its platform (subtext: beating Apple)
    • “We have become the top platform for podcast consumption in 60-plus countries. And now, according to Edison Research and our own internal sources, we recently became the number one podcast platform US listeners use the most” (subtext: beating Apple)
    • In the quarter, podcast ad revenue grew 627% year-on-year, and is ahead of its plans. Revenue per listening hour is growing (and unlike music, the costs don’t increase with them). But podcasts are expensive for Spotify, and “a drag on overall gross margins”.
    • The podcast share of overall consumption hours [on Spotify] has reached an all-time high; but “one of the big things that we’re still trying to learn and improve upon is just providing an even better discovery experience on podcasting”.
    • Daniel Ek is on the Spotify: On The Record show to talk about more.
    • In Sounds Profitable with Podsights today, Bryan Barletta says that Spotify’s new offerings for buyers of podcast advertising will benefit all the industry, not just Spotify.
  • The Ed Mylett Show has signed with SiriusXM. He was hosting with Libsyn, and was independently represented.

  • The X Fronts are today (Thurs Oct 28) at 10am EST - a free, industry leading indie podcast upfront featuring some of the smartest people in the industry.

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Spotify Analysis

our Editor, James Cridland, writes:

The “number one podcast platform US listeners use the most” line will cause many tedious arguments. But, it’s very carefully stated - and is related to total users, not total downloads - strictly, the answer to “What platform or service do you use MOST to listen to podcasts?” That’s from Edison Research’s Podcast Consumer Tracker, and is published here. It should be no real surprise. Spotify is available on Android, which has a 46% share of the US mobile market: but, despite Apple Music and Apple TV being available on Android, Apple hasn’t bothered to release Apple Podcasts there. Additionally, Spotify does have a long way to go to be the #1 podcast platform for downloads, as anyone will tell you.

The total number of podcasts that Spotify has in its platform, 3.2m, is a relatively meaningless figure. “Over 80% of new podcasters on [Spotify] are using the Anchor platform”, they say, and that’s no surprise - given that Anchor automatically publishes to Spotify, and doesn’t to Apple. It’s not just Anchor users: only 60% of Buzzsprout’s shows are on Apple; and that may be because Apple hasn’t given any APIs to podcast hosting companies to make it easier. Guess who has? Spotify. If Apple are smarting at being called second-biggest and second-best, they only have themselves to blame.

Podcasts are significantly helping Spotify’s ad revenue, which was up 75% year-on-year to €323 million ($374m). That looks good, though a) total revenue is €2,501 million ($2.9 billion), so ad revenue accounts for just 13%; and b) Q3 last year was still significantly affected by the pandemic, so a decent increase should be expected. This time last year, Spotify wasn’t selling Joe Rogan, either.

Spotify says that “the percentage of MAUs [monthly active users] that engaged with podcast content continued to increase throughout the quarter”, but they aren’t telling us what that number is any more - back in Q4/20, it was 25% (95m people in today’s figures). A “podcast MAU” is defined as someone who has listened to more than 0 milliseconds of a podcast in a month: it’s odd that they wouldn’t follow the IAB standard of at least 60-seconds. As it is, if you mistakenly choose their 'driving to work’ playlist, and stab hurriedly at the dashboard to avoid any hint of Michael Barbaro, you’ll be classified as someone who listens to podcasts. Exaggerated though the numbers might be, we’d be keen to understand why three-quarters of Spotify users steer clear of podcasts altogether.


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