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Spotify have pledged to invest some serious dough into the podcasting craze. But are they too late to the party?
According to a third-party survey released last summer, worldwide podcasting revenue in 2019 will likely increase 110% from 2017 figures, topping out at $659 million USD.
Itβs a pretty big number for whatβs traditionally been considered a format thatβs difficult to monetise, and it could have something to do with the fact that literally everyone and his dog is listening to podcasts these days.
Hence, Spotify have made the logical yet risky decision to invest heavily in podcasts. Two major acquisitions were announced early Friday 8th February, with Spotify purchasing podcasting platforms Gimlet and Anchor.
Anchor reportedly put Spotify $14.4 million out of pocket, whilst Gimlet cost a whopping $230 million. But this figure is by no means the end of Spotifyβs podcast investment spree, as theyβve recently stated their willingness to spend up to $500 mil on the space this year alone.
So, what makes Spotify so confident that it will be able to get a return on such a massive investment?
After all, podcasting has been the domain of Apple since around 2004 and has existed in some form for almost 20 years, since 2000. Itβs not exactly the hip new thing.
According to Spotifyβs Chief R&D Officer Gustav SΓΆderstrΓΆm, after the company saw the volume of listeners downloading podcasts onto their Spotify despite the inadequacy of the platform to house them, they realised the dire need to meet consumer demands.
It seems Spotify has stumbled upon a pretty simple, salient truth: people prefer fewer apps on their phone and would very much appreciate having all their audio in one place.
One thing Spotify could certainly bring to the podcast game that Apple is yet to master is their masterful βdiscoverβ feature. Being able to curate algorithms and direct consumers to further material could change the game, as finding new podcast content can often be a bit of a headache.
Eventually, Spotify will monetize podcasts the same way it has music – through subscriptions and ad revenue. But, in the short term, the company will allow Gimlet and Anchor to operate as they have.
