After snatching the rights to the Joe Rogan Experience from the hands of its competitors, Spotify is charging ahead with its podcast strategy. Does the streaming platform just want to be the biggest on the block – at any cost?
In the first three months of 2020, Spotify reported a 31% rise in paid subscribers. Despite reaching 130 million paying customers, due to a slowdown in advertising because of coronavirus its revenue rise fell short of analyst estimates.
Beyond advertisers tightening their purse strings, with most listeners staying at home, listening habits have changed dramatically. No longer your companion for the morning commute, Spotify is banking on people tuning in from home to continue its steady growth and pay off its podcast acquisition debts.
While Spotify is often viewed as a music streaming platform, through an expansive podcast strategy, the platform is trying to shake off that association and position itself more broadly, as the largest audio platform in the world instead.
Expansive podcast library
In May, Spotify made a colossal announcement. The streaming service had banked exclusive rights to Joe Rogan – comedian, MMA commentator, and an extremely popular podcaster. Prior to the deal, The Joe Rogan Experience was downloaded 190m times a week. It was the most popular podcast on Apple platforms last year, and his vodcasts on YouTube have garnered over 2 billion views to date.
Stealing Rogan away from rivals came at a jaw-dropping price, with the Wall Street Journal claiming it to be worth “more than $100m“. And it has redefined where the money is, as far as talent is concerned. By contrast, a musician would need to generate 23 billion streams on Spotify to earn what the platform is paying Rogan for his podcast rights.
While it was a hefty buy, Spotify is confident it was the right decision. “The Joe Rogan Experience is the most searched for podcast today on our platform. And it's not on our platform yet,” says Rak Patel, head of sales for the UK and EMEA, excitedly.
“It’s critical our fans get the content that they want,” he explains when asked about ensuring ROI. “Our strategy is centred around ensuring we have a full suite of content available.”
The Rogan acquisition is the latest in Spotify‘s podcast shopping spree. Over the last year, the Swedish-based company has bought The Ringer, Parcast, Gimlet and Anchor. Which, depending on final considerations and deal incentives, has seen Spotify spend nearly a billion dollars on podcasting.
And with big names like Rogan on board, Spotify is banking on its burgeoning podcast library to increase usage, engagement, and retention across both ad-supported and premium accounts.
In Q1 alone, it launched 78 ‘Originals & Exclusives’ podcasts globally, helping to bring Spotify’s total library up to over a million. Beyond producing its own original content, the platform is encouraging its users to produce their own during lockdown.
“In April, we saw over 150,000 podcasts uploaded onto the platform and 60% of those were through Anchor,” Patel claims. Spotify acquired the podcast creation platform back in 2019 for an estimated $140m. “It allows anyone to create, upload and manage a podcast. April’s upload was a 70% increase since February.”
With the increased usage of video conferencing with people in lockdown, Anchor also enables people to turn video chats into podcast-ready audio.
Improving audience data
“The appetite within agencies and clients and advertisers for podcasts is huge,” Patel claims. “We want to get to a level which means that brands can run really meaningful activities on an ongoing basis.“
And with Spotify throwing money at the format, it needs to ensure it has a streamlined strategy for feeding that money back.
In January, the platform introduced what it’s calling streaming ad insertion (SAI) – a feature that will show both podcast advertisers and creators more information about their audiences.
“In terms of measurement and effectiveness in the podcast space, I don’t think we're there yet,“ explains Patel. “Through SAI, we can provide brands with insights they would expect from any type of digital activity they’d run in other area. For me as a commercial lead, that's a really big step forward.“
The tech makes ad impressions, reach, frequency and anonymized audience insights, such as age, gender, and device type, available.
While the feature is live in the US, Patel says that there isn't a fixed date for its introduction in the UK.
Changing listening habits in lockdown
Despite lockdown putting an end to most people's podcast commute habits, Patel claims that: “Podcast listening is up hugely. Over the last two or three months, people at home have been using it to stay informed and entertained.”
While podcasts about football have taken a hit, other areas have thrived. With people locked-in, hobby podcasts are having a moment. Listeners are tuning in to ’Just Wanna Quilt’, with streams up more than 125%, while WeCrochet has seen streams increase more than 60%.
Gardening-themed podcasts have also spiked, with the most popular being The Joe Gardener Show, Epic Gardening: Daily Growing Tips and Advice, and The RHS Gardening Podcast.
And with people feeling more stressed and anxious during this time, there has been an uptick in the consumption of podcasts related to wellness and meditation.
As the world gradually eases out from under lockdown, over the next few months, old streaming habits will return – though new ones may remain. And as Spotify looks to September when the Joe Rogan Experience debuts on the service, it will be interesting to see whether the platform's big investment will pay off through the acquisition of new fans.