Finance

Spotify Brought In $215 Million On Podcasts After Investing $1 Billion—But Says It’s Still In ‘Investment Mode’

06/08/2022
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Topline

Spotify brought in roughly $215 million in revenue through podcasts in 2021—after spending $1 billion on them—the company announced Wednesday during an investor presentation, saying the program is still in “investment mode.”

Key Facts

Chief content and advertising business officer Dawn Ostroff said the company expects podcasts to be a “$20 billion opportunity,” according to the Hollywood Reporter.

Ostroff said Spotify’s investment in podcasts is “starting to pay off” as it grows its advertising arsenal.

CEO Daniel Ek said the company is growing its use of machine learning to encourage personalized podcast suggestions so users can discover new shows—a service it first offered for music discovery.

Ek said that while Spotify’s podcast vertical is “not yet profitable, we believe it has a 40 to 50% gross margin potential.”

Podcast revenue increased 300% year-over-year, CFO Paul Vogel said, according to Variety.

Big Number

4 million. That’s how many podcasts are available on Spotify.

Key Background

Spotify acquired podcast production house Gimlet Media in 2019 for a reported $230 million, and purchased The Ringer network in 2020. It has also purchased the rights to exclusively distribute two extremely-popular podcasts, Call Her Daddy and Joe Rogan’s The Joe Rogan Experience. Rogan’s podcast caused controversy for Spotify at the start of this year when he came under fire for having guests on his show that spread misinformation about Covid-19 vaccines during their appearances, as well as making racially insensitive remarks. Rogan’s podcast was the most popular podcast on the platform last year. Prompted by Neil Young, several artists pulled their music from Spotify in protest. The New York Times reported in February that Spotify paid Rogan $200 million to house his show, $100 million more than was originally reported.

Further Reading

Joe Rogan’s Spotify Deal Allegedly Worth $200 Million, Doubling Initial Report (Forbes)

Spotify Pulls More Than 110 Episodes Of Joe Rogan’s Podcast (Forbes)

Crosby And Stills Join Nash And Young In Spotify Boycott Over Joe Rogan — Here’s The Full List (Forbes)

Source: https://www.forbes.com/sites/marisadellatto/2022/06/08/spotify-brought-in-215-million-on-podcasts-after-investing-1-billion-but-says-its-still-in-investment-mode/