The audio giant Spotify spent $1 billion on podcasts in 2021 and expects to boost its ad revenue to some $10 billion annually over time as the platform doubles down on podcasts and content creators.
At an investor day conference on Wednesday, Spotify unveiled some metrics on its streaming business and introduced several new advertising plans coming to the platform. The company said it has 182 million subscribers and aims to grow to 1 billion users by 2030, more than doubling its current user base of roughly 422 million.
In Q1, the company said 30% of its monthly active users, or MAUs, engaged in podcast content, but the platform is only monetizing 14% of that business. In the next three to five years, it hopes to grow the podcast vertical by adding more publishers and creators, thereby increasing its advertisers, and estimates reaching $100 billion in revenue in the next decade, CEO Daniel Ek said.
In 2021, Spotify generated about $215 million, or 200 euros, in podcast revenue, according to chief content and advertising business officer Dawn Ostroff. She said the company is still expanding its podcast business and is still in “investment mode.” Its U.S. podcast ad revenue reached $1.4 billion last year and is poised to exceed $4 billion by 2024, according to a study by Interactive Advertising Bureau.
Spotify is also continuing to expand its ad network, the Spotify Audience Network, after acquiring podcast platforms and tech companies including Megaphone, Anchor, Chartable and Podsights. The platform will be introducing streaming ad insertion across new markets and increasing its music inventory as it aims to boost content creation. Spotify advertisers and creators also get call-to-action cards added to the ad experience and tools for measuring their campaigns.
In May, Spotify reshuffled its leadership team and created new departments to support its move into the content vertical. Max Cutler, currently head of new content initiatives and managing director of Parcast, was promoted to head of talk creator content and partnerships. Cutler will manage and grow its emerging creator ecosystem, licensed content and work on new content initiatives. As part of this expansion, Spotify will also be starting a Creator Content operation overseen by Cutler.
Julie McNamara will continue to serve as head of talk studios, where she will oversee all original content across the music platform. This includes all series from The Ringer, Parcast and Gimlet, as well as Major Original Partnerships with Bad Robot and DC/Warner Brother’s “Batman Unburied.” This summer, Spotify will also announce a global markets lead of talk content, a role that will be responsible for streamlining collaboration and intellectual property globally, according to the company.
The platform offers some 4 million podcasts to date and has already dropped billions on acquiring podcasting companies and exclusive content deals, including “The Joe Rogan Experience” and “Call Her Daddy” with Alex Cooper. Spotify said it’s acquiring two more podcast tech platforms, Chartable and Podsight, and is also among those considering bids on another podcasting platform, Audioboom.
The United Kingdom, Germany and Japan are Spotify’s biggest markets, and the company said it plans to invest more in emerging regions in Latin America and Southeast Asia. Eventually, the platform will offer content bundles including music, podcasts and live content as it expands this model and experiments with subscriptions.