Whether or not you employ Spotify or not, you’re most likely conscious that the tech large has been investing loads in podcast movies lately.
There’s been a rising pattern in the direction of video content material extra usually lately, and this has naturally bled into the podcasting area. So after all, Spotify desires to be a part of that in an enormous manner.
To capitalize on this content material pattern, Spotify has begun channelling substantial assets into video podcasts. However is that this the one motive it’s investing closely within the video area?
Let’s check out Spotify’s journey into podcasting to this point, what it tells us about this current dive into video, and what this probably means for podcasters.
Spotify’s Podcast Journey So Far
Spotify entered the podcast market comparatively late. Whereas podcasts have been obtainable on the platform since 2015, it wasn’t till 2019 that Spotify made clear its intentions to change into an lively participant out there.
In a daring transfer, CEO Daniel Ek declared that Spotify was positioning itself to change into “the main producer of podcasts.” The corporate invested $400 million to acquire Gimlet, Anchor and Parcast – three key firms that had majorly contributed to the podcasting growth in the course of the pandemic. Buying Gimlet and Parcast was additionally a option to produce podcasts that could be adapted by Hollywood studios and generate revenue from mental property rights.
Through the years, Spotify continued to take a position closely in podcasting, spending another $1 billion on podcast-related deals and hiring into the podcast team. However then in 2022, a decline in promoting income led to a spending freeze. The corporate laid off round 200 Podcast-division employees and merged its Parcast and Gimlet groups into Spotify Studios.
After throwing virtually $1 billion on the business, Spotify made it clear it was deinvesting in podcasts in pursuit of better profits.
After which video got here alongside…
How is Spotify Investing in Video?
Spotify solely began providing video podcasts in 2020, when it purchased unique rights to Joe Rogan’s present, and he made it a requirement of the deal. Since then, Rogan has constantly held the #1 spot within the Spotify podcast charts and because of this, video consumption on Spotify has by no means been greater.
Spotify is driving that pattern wave, pushing ahead a method to get as a lot video content material on the platform as doable. For instance, you not should be a Spotify for Podcasters user to upload video.
Based on a report from Bloomberg, the corporate has additionally began incentivising video creators to distribute their reveals on its platform. It is a related technique to what YouTube was doing a couple of years in the past, when it began paying podcasters to create video versions of their reveals.
In some circumstances, Spotify is asking creators to do that totally free, promising advertising and marketing assist in return. Others are reportedly being provided seven-figure affords to add video content material.
In contrast to earlier methods, exclusivity isn’t a precedence anymore. As a substitute, Spotify appears targeted on constructing its video catalogue.
Let’s check out why that’s.
Why Spotify Is Investing in Video Podcasts
1. To capitalize on the rise of video platforms
Through the pandemic, on-line video consumption soared 215%. Between this and the truth that Google prioritises YouTube movies in search outcomes, it’s been estimated that 82% of internet traffic is now video.
Witnessing the rise in video platforms like YouTube and TikTok lately, it’s hardly shocking that Spotify desires to take a punt on it.
However the place podcast consumption is anxious, the rise in video platforms isn’t so black and white.
Whereas YouTube is used much more for podcast consumption these days, we discovered that most podcasters publish their content as audio on the platform, simply with a static picture or audiogram.
2. To enchantment to new world markets
The largest markets for creators publishing video embody the U.S., Brazil, and Mexico. In Brazil and the Philippines, around 20% of all active podcast creators now publish video content – almost double the share from the earlier yr.
With these insights, it’s clear that Spotify’s concentrating on strategic expansions into high-growth, rising markets as a part of its plan to domesticate various world audiences.
3. To enhance consumer expertise
This push for video can also be a part of a broader technique to boost the Spotify consumer expertise. Except for video, Spotify has launched different sorts of content material to cater to consumer wants previously, like music movies and video-based studying programs.
Nonetheless, the most important space of development has come from video. These recent statistics shared by Spotify reveal the size of this development:
- Greater than 170 million customers have watched a video podcast on Spotify.
- Over half of the highest 20 podcasts on the platform now embody video.
- International each day streams of video podcasts have elevated by 39% year-on-year.
- Within the U.S., almost two-thirds of podcast listeners say they like reveals that embody video.
- The variety of creators publishing video podcasts has grown by 70% year-over-year.
4. To generate extra promoting income
YouTube is at the moment dominating the video podcast market. The corporate lately launched figures that present perception into how profitable video promoting may be.
In Q2 2024, YouTube’s ad revenue grew by 13% year-over-year, reaching $8.66 billion. Because the market chief, YouTube has set a excessive bar, however Spotify’s funding in video suggests it desires a share of that market. This effort mirrors Spotify’s earlier push into the podcast business, the place it efficiently took market share from Apple’s native podcast app.
By build up its video catalogue, it comes nearer to competing with YouTube because the go-to platform for video podcast consumption.
Spotify’s give attention to video additionally permits the corporate to construct on the momentum of its rising promoting enterprise. Over the previous six quarters, Spotify has achieved double-digit development in advert income. Based on WARC Media, the corporate’s world promoting income is predicted to exceed $2 billion for the primary time in 2024. By 2026, income is projected to achieve $2.6 billion.
Notably, podcast promoting income development has outpaced Spotify’s music promoting monetization. This success is essentially because of a rise in impressions bought via the Spotify Viewers Community, masking each authentic and licensed content material. As Spotify continues to develop its video capabilities, this might additional speed up the expansion of its promoting enterprise too.
What Does This Imply for Podcasters?
Spotify’s present technique displays a robust dedication to video. However who is aware of how lengthy it’ll final?
As podcasters, it’s essential to look past the pattern and give attention to what works for you. It will all the time be crucial factor you are able to do in your present. If creating video in your podcast isn’t in your agenda, forcing your self into it’ll solely decelerate your manufacturing.
Should you do determine to begin sharing video content material of your podcast on Spotify, there’s one disruption to pay attention to: dynamic ads.
While you add video content material to Spotify, the platform pulls the audio from the video as an alternative of the RSS feed. Consequently, dynamic adverts can not be inserted. When this occurs, podcasters are pressured to depend on static adverts that stay embedded within the content material completely, limiting their potential to replace adverts and lowering income alternatives.
Whereas including video to Spotify does provide new alternatives for larger engagement and attain, it’ll mark a shift from dynamic adverts in the direction of proprietary applied sciences managed by platforms like Spotify and YouTube. With each firms main in podcast consumption and neither supporting dynamic adverts, this transfer may have a longer-term impression on the podcasting monetization panorama.
Whereas that’s a bridge podcasters might should cross sooner or later, the excellent news is that monetisation within the medium extends far past adverts and sponsorship, and there are various different methods to make money from your podcast.
And with a closing notice on video podcasts, are you feeling strain to hitch the craze? In that case, here’s an article that might make you feel better.
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