Spotify’s podcast business is booming despite — or perhaps, because of — the COVID-19 pandemic. The company says it has now grown its podcast catalog to more than a million shows, up from the 700,000-plus podcasts it was reporting just this March. Podcaster listeners are also “more engaged overall” and “listen to more music,” the company noted, which may have helped boost Spotify’s overall listener and subscriber increases in the first quarter. In addition, podcast consumption was up by “triple digits” in Q1 2020 compared with the same quarter last year, Spotify said.
The streaming music service reported its monthly active user base is now at 286 million, with more users joining the ad-supported free service amid the coronavirus pandemic. It also beat on both earnings and revenue in Q1 2020, with -$0.20 earnings per share on a diluted basis and revenue of roughly $2 billion (€1.848 billion.)
Podcasts have now become a key part to Spotify’s business in recent years, and were addressed several times during Spotify’s call with investors on Wednesday.
The company has now made several investments in creator tools, podcast services and original content and media studios related to its interests in podcasts. Spotify said it plans to continue its acquisitions in the future, as well, if the current environment means “there will be more advantageous deals to be done” — which, of course, it does.
Spotify also said Q1 2020 was its biggest-ever quarter for organic podcast creation.
Podcasters stuck at home were busy creating new shows and increasing their output on existing shows, it seems. Notably, 70% of the new podcasts in the quarter were created within Spotify’s own ecosystem via the Anchor podcast creation platform, the company said.
Spotify had acquired Anchor, a service that aims to make it easier to create podcasts, for an estimated $140 million in 2019. In the months that followed, the platform has continued to innovate on features designed to ease users into becoming podcasters — like its simple “record with friends” option for remote podcasting that’s now become particularly handy amid the quarantine. Yesterday, Anchor released a new feature to turn video chats into audio podcasts, as well.
These help to populate Spotify with a longer tail of content.
Spotify, to some extent, addressed concerns that its podcast business had suffered due to the coronavirus outbreak. As more users have shifted their listening from cars and commutes to the home, podcast listening had declined industry-wide over the past several weeks. (Recent reports indicate a turnaround is starting to shape up, however.)
Spotify, however, said podcast consumption grew in the quarter.
The company said podcast consumption grew by triple digits in Q1 2020 compared with the same quarter last year. While that’s not as relevant a metric as a quarter-over-quarter increase would have been, it at least indicates that overall, the podcast side of the business is still growing.
In addition, one of Spotify’s own shows — a daily news podcast in Germany — has already become the second-largest show in the country, and a top-20 show worldwide. Plus, this week Spotify was finally able to add “This American Life,” the No. 5 show in the U.S., to its lineup as an exclusive streaming deal with Pandora lapsed.
The company admitted it was still trying to figure out how to market its own shows, though. It said it would continue experimenting with decisions like which to make exclusive to its service or which to offer in windowing deals, and so on.
And while Spotify has planned to grow ad revenue by way of podcasts, it stressed that the economic downturn which has resulted in ad sales declines has had a minimal effect on this business. Only 10% of Spotify’s overall revenue today comes from ads, so it’s able to weather a drop in ad sales better than some others in the media and entertainment business.
“With so many unknowns, there are some questions we simply can’t answer at this point,” noted Spotify CEO Daniel Ek as to how the COVID-19 pandemic will continue to impact the business. “But I can say that I’m confident that we will continue to be in a position of strength when this is behind us. And that’s because of our models, our scale, and our superior user experience. And, of course, our content pipeline,” he added.
Update, 4/30/20: Apple has now surpassed 1 million podcasts, but had not updated its website as of the time of publication. We’ve removed a reference to its 800K podcast catalog in order to be accurate.