The podcast industry continues to attract attention from consumers as well as actors in the Nordics. Especially Spotify has expressed an explicit ambition to take lead in this industry. Its Q4 earnings report focused heavily on podcasts.
Spotify´s Q4 19 earnings report revealed that revenues increased by 24% YOY to a total of 1.86 bn EUR for the quarter. The surge in revenue stems mainly from an increase in premium subscriptions, up 29% YOY. Total premium subscriptions now tally 124 million globally. However, operating loss amounted to 77 million euro, approx. 40 million more than analyst´s expectations. Spotify identified increased costs due to investments, especially within podcasts and tech, as the main reason, while declaring that “2020 will be a year of continued investments”.
Investments in the podcast industry have been the clear focus for Spotify during 2019, primarily proven by the acquisitions of American podcast companies Gimlet Media and Anchor. During the earnings call, Spotify´s next acquisition was revealed – American sports and entertainment media company The Ringer, carrying more than 30 highly popular podcasts in its network. Reportedly, Spotify paid 250 million USD to aquire the company. Consumption of podcasts on their service increased 200% YOY in Q4 19, according to Spotify. The company claims that 16% of its global MAU:s (monthly active users) engage with podcast content on the platform.
In Sweden, the appetite for podcast content is significantly higher among Spotify subscribers compared to the overall population. According to Mediavision’s Q4 analysis of the Swedish audio market, almost 20% of all Swedes aged 15 to 74 listened to podcasts an average day compared to 30% among Spotify subscribers. Out of these podcast listeners, approximately two thirds used Spotify to access the content. Given Spotify’s dominating position in music streaming across the Nordics, the service has the potential to help drive further growth in podcast consumption during 2020 and beyond.
However, the overall podcast market has yet to take off in terms of monetary ROI. The Swedish ad market for podcasts still lies comparatively dormant (vs eg Radio) despite the vast bulk of podcast content being ad-supported. Furthermore, only 4% (approximately 150 000 households) of the Swedish households state having paid for podcasts during an average month of Q4 2019. Will Spotify’s push into the area help the overall Nordic market for podcasts, or will it mainly drive subscriptions to its (predominantly) music focused streaming service? Mediavision follows the developments closely as we venture into 2020.
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