Spotify Is Counting on Podcasting – not Music – to Drive Profitable Growth | Analysis

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The audio streaming service now has 205 million paying users, but it’s still losing money and and it’s banking that diversifying audio formats will change that

Founder and Chief Executive Officer of Spotify Daniel Ek speaks onstage during Spotify Investor Day in 2018
Founder and Chief Executive Officer of Spotify Daniel Ek speaks onstage during Spotify Investor Day in 2018. (Ilya S. Savenok/Getty Images)

Spotify’s podcasting business has generated endless bad press for the Swedish music streamer: the Joe Rogan controversy, layoffs and cutbacks at its studios and the departure of a key executive. But its latest earnings report flipped the script, with CEO Daniel Ek crediting podcasts with retaining paying customers and helping steer the money-losing company on a path to profit.

The company presented its podcasting business as flourishing in a presentation accompanying the earnings release, noting that podcasts drove a 14% increase in advertising revenue. Podcasts, Ek told analysts on a call Tuesday, increased retention: “And as that happening, it is impacting our business.”

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