Spotify’s Attempt At Podcast Domination Is Failing, Does That Effect Your Show?

I recently came across a genuinely brilliantly written article about Spotify and how — in the journalist’s opinion — their billion-dollar bet into the podcast sector is yet to pay off.

The piece from Bloomberg highlights that the streaming giant is looking to move away from being so reliant on the very competitive and unprofitable music streaming market which — through the agreements with record labels — requires them to pay around 70% of every dollar from streaming revenue. Now it doesn’t take a maths genius to work out that you’ve got to do a HELL of a lot of streaming to make a 30% gross margin feasible.

This being the case, Spotify’s move to try to effectively buy up market share — through acquisitions of successful podcast production businesses and getting exclusivity with the likes of Joe Rogan — makes a lot of sense… on paper.

But, based on the fact that podcasting only accounted for 7% of total listening hours in Q1 of 2022 and just 2% of their revenue last year, it seems that they are going to have to do something more than just buying their way to success in this space.

One of the metrics of achievement that Spotify keeps touting is their ascent towards taking a big chunk of Apple’s market share when it comes to podcasts but, in all honesty, their increase in brand awareness doesn’t seem to reflect download numbers / streams from what I can see. Furthermore, the numbers seem to have stagnated in the last year or so, which I am sure the Exec team at Spotify are a bit surprised at, especially after spending so much money in this area.

In fact, based on the musings of Lucas Shaw (my new favourite journo) I decided to take a look at how the stats are playing out in our own agency.

I have been podcasting myself since 2017 and as a media coach and mentor, I have been involved in the launch of 158 client podcasts to date. My podcast production agency, Phonic Content, produces dozens of client shows per week and we work on the launch of 3–5 brand new shows each month for clients around the world too. So — in our own way — we have a good amount of data to look at when it comes to what is happening in the market, in real-time.

Now, it is important to state that, as an agency, we ‘help brands and business owners to explode their brand utilising the power of audio’ that is our remit, in fact, that is our mission statement. So I know we serve a certain market, creating a certain type of content. Want beautiful narrative story-telling about a murder… that is not us! We are very focused on creating brand-building audio that positions our clients as experts and authorities in their sector.

I say this to highlight that the numbers stated below are that of shows with a certain demographic, aiming at a certain outcome, and serving a certain audience. So the exclusion of content categories such as True Crime might have a big sway on the overall picture of Spotify’s podcast achievements, but I doubt it.

Anyway, here is what we found by looking at 10 of our clients, randomly selected for this unofficial, unsolicited and unrequested survey that we just decided to do this AM at 7:16am!

Overall 37% of all our client downloads came from Spotify

Health and Wellness style content performs slightly above average at 39%

Business content is well under the average at 18% — investing content is even less popular with just 13% reach on Spotify

Music-focused shows well outperform the average download/streaming numbers (one of our shows generates 213% of its audience from Spotify)

Shows with ‘celebrity’ hosts tend to perform above average at 45%

Parenting shows seem to attract low numbers (unsurprisingly given the age demo of streaming) 14%

Now, as stated above — before all the survey purists jump on me — these numbers are taken from just 10 randomly selected shows that we work on weekly for our clients. But they do give an interesting snapshot of what is happening in the marketplace.

In all honesty, we were actually surprised to see the overall number come out at 37% — much higher than we expected. But what this does go to show is that, as a podcast maker, it’s definitely worth having your content on multiple platforms (unless of course, you are doing a specific exclusivity deal). By using platforms like Libsyn, Acast, Captivate, Buzzsprout etc. you can set up the back end of your account to automatically syndicate your content to multiple places simultaneously — and that is something you should definitely do.

The other reason that being on multiple platforms is vital is to protect content makers. Let’s say for example that Spotify decides that podcasting is no longer a priority so they remove it from the homepage — that could affect your downloads. Or, more impactful would be a move from Apple which could say ‘you know what, podcasts as a mandatory app on the iPhone is not a good move for us anymore’, which would potentially have a huge impact on download numbers.

But, as you can see from the above, with podcast revenues continuing to climb, it is very unlikely that the streaming and download platforms will do anything other than throw more attention, energy and focus at the sector which should, in turn, enable everyone to benefit.

So what will Spotify do? Well, quite frankly, who knows! The last time we posed that question they threw a billion dollars at the issue without much impact.

What would seem to make sense is to have time-limited exclusivity with content then being rolled out onto other platforms to take advantage of the wider market advertising revenue. The other place where they seemed to miss a huge trick was the combination of podcasts (via the standard app) and a live environment (through Greenroom or what they are now calling Spotify Live) — what a dog’s dinner that is. They had a huge opportunity with that IF they got some of their key content makers curating content on that social-audio platform. It would have been an unbelievable way to engage an audience and drive traffic to their native platforms…

Imagine if Joe Rogan did a live Q&A in Greenroom (or Spotify Live) a few days after his latest podcast release — the audience could get to engage with Joe directly, but they could only come up on stage and ask a question about that week’s show… He could play highlights or clips, he could even invite the guest into the Greenroom to field some questions etc. That would be unbelievable content that would then act as huge consumer-created viral marketing for the podcast.

Anyway, if anyone at Spotify sees this and thinks that is genius, please feel free to contact me — but be warned, my consultancy fees start with a $B… as in BIG!