In today’s Q4 earnings report, Spotify reveals a massive 200% year-on-year increase in podcast listeners. With 124 million premium users, how far can their listener numbers rise?
Spotify and podcasts
Since announcing the changes to their algorithm last November, Spotify has seen a numbers boost. In their quarterly earnings report, released today, they show that 16% of Spotify users are now listening to podcasts through the service.
In introducing the new podcast function to the platform, Spotify has invested a reported $400-500 million into the format.
The service includes a prompt button to guide users to the podcasts on offer. Since Spotify has always been known as a music streaming site, they have gone all out on publicising the expansion to their algorithm.
The Decade Wrapped, released at the end of the year, was the first big podcast launch exclusive to Spotify.
The listener boom
Whilst the headline figure of a 200% increase sounds impressive, it is worth remembering that podcasts are new to Spotify. Without any comparable figures for last year, I’d expect the jump to be pretty significant!
With 700,000 podcasts now on Spotify, this is certainly a trend they are betting big on. They have even introduced pet playlists and a canine-specific podcast called ‘My Dogs Favourite Podcast‘.
However, are podcasts really the future of streaming?
Broadcasts of the future
Whilst 165 million people in the US have listened to podcasts, there has been a recent backlash about whether they are having a negative impact.
The attraction is that a podcast is significantly cheaper to produce and broadcast than any form of visual media. They can be prerecorded and edited prior to launch and require fairly basic audio equipment.
Indeed, some podcasts pride themselves on having an ‘authentic’ feel whereby the annoying background crackle is seen as a good thing!
Along with the cheap production costs, advertisers are seeing the growth in listener numbers as a prime way to take advantage of marketing potential. With Spotify announcing that 16% of their users are taking advantage of the podcast function, that equates to about 43 million people. This is based on the latest figures of 271 million monthly active users worldwide.
According to Fire Nation, advertising in a podcast costs around $18 per 1,000 listeners. In contrast, mainstream TV advertising costs upwards of $650,000 for a 30-second slot in a show like NBC Sunday Night Football.
With an average audience of 20.5 million, this compares as $31 per 1,000 viewers.
Engagement numbers are slightly harder to predict since it very much depends on the show. However, a podcast audience is likely to be more engaged with the broadcast, and tend to follow particular producers whose content they relate to.
The issue with podcasts is the propensity for negative influences. Without any fact-checking taking place and with very limited regulation, podcast broadcasting is still very much an open medium.
Spotify certainly thinks it is the future. Having announced a number of partnerships including one with Barack and Michelle Obama’s production company, this is an upward trajectory that looks set to continue to rise.
Do you listen to podcasts? How do you think they compare as entertainment with other forms of media? Do you think more regulation would be seen as a positive, or impact producer’s ability to speak their mind?