Podcasts aren’t yet profitable for Spotify, but the company is determined to see returns on its $1 billion investment within the next two years. CCO Dawn Ostroff told investors yesterday that podcasts brought in about $215 million last year. (Sure puts that $200 million Joe Rogan price tag into perspective.)
Onstage at Investor Day, CEO Daniel Ek focused on the revenue potential of Spotify’s acquisitions: All of those tools, adtech, and studios add up to a “$20 billion opportunity.” Maya Prohovnik, Spotify’s new head of Talk, called RSS “outdated technology” that’s holding back the rest of podcasting.
iHeartPodcast Network CEO Conal Byrne, also commented on RSS yesterday: “RSS feeds flow economic power back to publishers and creators,” he wrote in Forbes. “Even if I decide to plug the show into services like Spotify or Apple to let them carry it, the data, ads and content all flow back to me.”
Back to Spotify. One lucrative development that didn’t come up (as far as we’re aware) was the decision to bring back political ads. The company suspended them in 2020, but now plans to run them “across thousands of podcasts on and off Spotify,” the company told potential partners last month.
Despite serious problems with content review and enforcement, Spotify is going into the 2022 election cycle without establishing a public ad library. This is unusual. Google and Facebook (ok, Meta) both maintain open archives – it’s considered standard for major tech platforms that run political ads on their sites.
A lack of “robustness” in its systems was the original reason for stopping political ads. Those systems have since been strengthened, a spokesperson told Protocol. We’ll see. Candidates, parties, and PACs spend staggering amounts on advertising, more and more of which is packed with misinformation.
Spotify promises political advertisers the ability to use contextual targeting, one of the adtech innovations celebrated yesterday. AI insertion and political messaging are a risky mix, but not necessarily for investors. It’s been shown that oversight-related fallout has little impact on Spotify’s subscriber base.
For dessert, this sentence from TechCrunch about Investor Day: “Each new show created on Anchor brings in an additional 2.5 million monthly active users to the service.” That misplaced ‘million’ just about made your editor fall out of her chair. (The number is of course 2.5. We’ve let them know.)
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