With that reputation, then, it would seem the most natural thing in the world that these platforms for music aficionados would eventually turn those machine learning tools to other broadcast genres.
Welcome to the world of Spotify and Pandora podcasts!
Spotify and Pandora Through the Looking Glass
Despite their reputations as vaults for any kind of music a listener might want to hear, both Spotify and Pandora have carried podcasts for a while.
In fact, there are over 150,000 podcasts on Spotify, Pandora boats hundreds, according to The Wall Street Journal. Despite this, podcasts have only become a focus of these platforms in the last few months as they eye ways to increase engagement with broadcast radio listeners.
“The vast majority of the minutes that are being spent on radio today haven’t yet moved online. So our opportunity really is gigantic,”explained Spotify CEO Daniel Ek. “As part of that, obviously, we think non-music content has a very important place.”
Because podcasts are significantly less expensive to produce and provide more opportunities for marketable advertising spots, they really have been overlooked opportunities for income. Last year alone, ad revenue from podcasts reached $313.9 million and 2018 figures are estimated to top $402 million.
Basically, Pandora and Spotify can’t afford to not carry monetize podcasts.
Coming Up Next…
Spotify is working on exclusive deals with celebrities and brands that Millennials identify with, from Amy Schumer to rapper Joe Budden. Another partnership with Vice News will result in its first ever podcast, “Chapo,” telling the story of Mexican drug kingpin Joaquin Guzman.
New Pandora podcast content hasn’t been disclosed yet, but the company has announced that it will be taking its Music Genome Project and applying it to podcasts. The ultimate goal being completely customized podcast recommendations based on hundreds of listener attributes gleaned through interaction with an individual listener.
Financial filings indicate that both companies spend about three quarters of their revenues to license the music on their platforms. Creating a viable place for podcasts in the audio space is a long-term strategy to better cement Pandora and Spotify’s places in the broadcast world.
Although analysts say that it’ll take about five more years for podcasting to really impact any bottom lines, the medium is still a useful branding tool. For distributors like Spotify and Pandora, podcasts are popular enough that not having them could be enough to turn a subscriber to a competing platform. Since podcasting is still relatively inexpensive to produce, the profit from advertising could also be substantial.