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Spotify stays bullish on podcasts as a key development driver

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Spotify month-to-month energetic customers reached 248 million in Q3 2019, up 30% year-over-year (YoY), per the agency’s Q3 2019 earnings launched yesterday morning.

Spotify Premium Vs. Ad Supported Users, Revenue

Trade Insider Intelligence

Spotify stays bullish on podcasts as a key improvement driver for the agency, correct through each the ad-supported and high class tiers of service. Whereas podcast adoption stays reasonably low correct through Spotify’s consumer dangerous, podcasts are using higher engagement on the platform — which ought to reinforce monetization of its free-tier customers.

 About 14% of Spotify’s complete MAU — round 35 million customers — hear to podcasts by the utilization of the app. And complete podcast hours streamed elevated 39% QoQ in Q3, thanks basically to consumption within the US and a variety of completely different European nations.

Spotify makes exceptional additional off of its high class sub dangerous than it does from its free tier, no subject nonetheless having additional ad-supported customers: Advert-supported customers legend for 56% of Spotify’s consumer dangerous, however simply 10% of its complete income. Rising world engagement with podcasts would possibly maybe maybe help Spotify enlarge the ARPU of its free-tier customers as podcast selling has grown an growing number of attention-grabbing to manufacturers. Per a current seek for commissioned by the BBC, self-known advert avoiders had been 22% additional engaged with manufacturers talked about in podcasts when put subsequent with frail TV commercials. 

  • Podcast listening would possibly maybe maybe moreover be using some ad-supported customers to transform to high class subscribers. Although Spotify could not explain causality, the agency illustrious that there is a sturdy correlation between podcast engagement and conversion of free to paid customers. That is on legend of customers who’re an growing number of gravitating towards the app for podcasts as well to to music would possibly maybe maybe be spending additional time with the app complete, boosting its utility and their chance to make investments in an ad-free expertise as a consequence. 

Three current developments in Spotify’s podcasting library and capabilities — made conceivable by its aggressive podcast investments — possible helped spark larger podcast engagement:

  • Curated playlists. Spotify launched a novel make of a individually tailor-made playlist referred to as “Your Day-to-day Power.” The novel playlist aimed to extend podcast discoverability by producing a spread of each podcasts and music tied to consumer pursuits provided in an with out issues consumable construction. Spotify customers could be on a standard basis launched to novel podcasts linked to their earlier listening habits.
  • Customizable playlists. Spotify adopted up on the success of “Your Day-to-day Power” by introducing a novel truthful that allowed cell customers so as to add podcasts to their fetch customized playlists. The truthful provided additional performance for customers who wished to be prepared to organize and inch a discipline of podcasts sequentially.
  • Distinctive, real podcasts. This quarter noticed the launch of 22 real titles produced by their in-apartment manufacturing service, together with “The Ringer: The Hottest Need” and “The Dialog with Amanda de Cadenet.” It moreover noticed the discharge of real productions from Gimlet Media, the podcast community Spotify obtained earlier this yr for a reported $230 million.

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