Spotify Expands Its Podcast Plans

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When it comes to music streaming services, change is happening rapidly at the moment. Spotify has dominated the market for such a long time that it seems almost unthinkable that any other company might be able to knock them off their perch, but that isn’t going to stop others from trying.

Amazon Music and Apple Music would love to capture some of Spotify’s market share, and Google has high hopes that focusing on exclusive music products through YouTube might prove to be a popular decision, too. Spotify can’t afford to rest on its laurels, and so it isn’t. We’ve known for a couple of months that the company is branching out into podcasts, but now they’re going further than we ever thought possible.

Spotify Expands Podcast Plan

Spotify Expands Its Podcast Plans

The problem that most streaming companies have at the moment is that they offer almost exactly the same songs and albums and have very little to differentiate their services from each other. The situation might perhaps be best compared to the battle between online slots websites, which rages fiercely in the gambling sector.

All of the best online slots websites already have access to all of the best Playtech casino, so it’s difficult to compete by offering games that your rivals don’t. Instead, they compete on price, additional services, and extra features. Most of the big sites might offer the same online slots, but not all of them offer live poker, for example.

Streaming services are now thinking along similar lines and trying to work out what else they might offer to their subscribers. For Spotify, podcasts are the way there’ going to go.

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A few days ago, we started to hear whispers that Spotify was going to take the few exclusive podcasts that it already offers, combine them with a few others, and begin to offer them as a podcast subscription service for an additional fee. The company recently surveyed its existing podcast listeners about this possibility and apparently received a favorable response.

Because we’ve seen the survey, we’re able to offer a few specifics regarding what the service might look like. At the lowest price point, which is currently listed at three dollars per month, listeners would gain access to interviews and podcasts that wouldn’t appear on the ‘regular’ Spotify platform but would still have to listen to adverts.

At the top end of the scale, costing eight dollars a month, the ads would disappear, and listeners would get early access to content, along with some ‘premium’ content that wouldn’t be available to other users. The service might be purchasable separately from ‘normal’ Spotify, meaning that a customer can pay for podcasts but not for music if that’s what they want from the platform.

Given the high-profile names that Spotify has recently attracted to its podcast platform, we probably shouldn’t be surprised to hear that the company is now considering asking for more money in return for access to them. Joe Rogan has been Spotify’s biggest recruit from the podcast world thus far, but Michelle Obama and Kim Kardashian-West have also signed exclusive, long-term deals with the company to create content.

It’s also been experimenting for the first time with video content – a move that’s sure to have set off the panic alarm within YouTube’s offices. While Spotify’s plans are generating a lot of internal excitement within the company, there might be a warning from recent history that they should pay attention to. A little over a year ago, Luminary attempted to carve itself a niche in the market as the place to go-to for exclusive podcast content.

They spent big money on talent, splashed out on a huge, high profile marketing campaign, and almost immediately ran into trouble. Luminary struggled to attract listeners and ended up replacing its CEO within its first six months of existence. Its pricing and royalty structure made it unpopular with the very same podcasters it wanted to come and create content for it.

At the time of writing, the app isn’t within the top 200 most popular downloads at Apple’s App Store, which would suggest that it’s struggling to attract listeners in any meaningful way. While there’s always gossip circulating in the tech world, much of which turns out to be unsubstantiated, the facts suggest that there’s something to this Spotify story.

Within days of the stories beginning to circulate online, Spotify announced the purchase of Megaphone – an advertising company that might hold the key to Spotify being able to monetize its fledgling podcast platform successfully. The purchase price for the acquisition is thought to be in the region of $235m. Using Megaphone’s technology, Spotify will be able to generate targeted adverts and also use Megaphone’s pre-existing monitoring tools to make advertising resources available to podcast publishers.

All of the podcasts that are currently hosted on Megaphone will become Spotify’s property, although it’s thought that their new owner isn’t planning to make any major changes in the foreseeable future other than ensuring that all the advertising revenue now goes directly to them. In theory, this latest purchase completes Spotify’s ‘all in one’ proposition to podcasters and their listeners. It has exclusive shows, creation software, ad sales facilities, and hosting space.

Aside from Megaphone, the company has bought up Parcast, The Ringer, and Gimlet Media. There are already signs that this aggressive approach is paying out dividends for them – at the end of 2020s second quarter, there were 1.5m podcasts available through Spotify. By the end of the third quarter, that number was 1.9m. When figures for the end of 2020 are published, we can probably safely assume that the number will have risen far higher than 2m.

The only question will be how many of those podcasts are available to people who pay for a Spotify subscription, and how many have suddenly moved behind a secondary paywall. Two years ago, Spotify wasn’t even involved in the podcast game. Now, it’s bought its way into a position where it might well dominate it completely within the next twelve months.

A ball has most definitely been served in the latest round of the streaming wars, so our attention now turns to the question of who’s going to fire it back over the net and what means they might use to do so.