Will Spotify keep podcasts free?
The second reason I think there’s no paywall (yet) is that there’s no need. Free podcasts can still make good revenue from advertising. A quick look at financial records of some of the newly created podcast-only media companies shows there’s lots of money to be made from adsupported podcasts.
A company like Spotify, which has been serving ad-supported music to the majority of its users for 14-years, is well placed to do the same with podcasts.
Here’s another stat that might help explain why Spotify is keeping its podcasts free. Data suggests the ‘‘ad recall lift’’ for podcasts can increase by 180 per cent.
The ad recall lift, by the way, is the number of people who can recall/remember an advert divided by the number of people it reached.
Spotify also has something its main podcast rival, Apple, doesn’t have. Data. More importantly, a willingness to exploit data.
And even though Apple owns a 63 per cent share (according to data from Libsyn) of the industry via its Podcast app, it doesn’t collect data about its users. It’s a company, as it keeps reminding us, which manages to do really well at making money from selling excellent devices, not its users’ data.
And Apple is not about to change this winning multibillion-dollar formula just to compete in the podcast industry with Spotify anytime soon.
At last month’s Consumer Electronics Show in Las Vegas, Spotify gave us another hint that it was preparing its data offensive by launching a new podcast-specific feature called Streaming Ad Insertion (SIA).
This new feature gives podcast advertisers something they’ve lacked until now. Yep, you’ve guessed it. Data.
Now, advertisers who spend with Spotify can get key metrics about who is listening to their ads. Impressions, frequency, reach, plus anonymised age, gender and device type – this is what SIA brings.
And although all of the above makes a pretty strong case for Spotify never putting its podcasts behind a paywall, I still think it will.
Why? Because people hate ads. I know this because I do too. I *always* mash the 30-second fast forward button until I’ve dodged the content from the brands who are actually paying for my favourite podcasts.
In fact, the only time I do let the ads play is when I’m driving, and I’m forced to, or if I’ve fallen asleep with my headphones in – making me a terrible user for Spotify’s ad recall metrics.
I’m not a total freeloader though. I have more than my fair share of subscriptions. I already (happily) pay for Spotify, Netflix, Audible, Amazon Prime Instant Video, Apple TV, Apple Arcade, Spark Sport, Sky Sport Now, PlayStation Now, as well as iCloud storage and Google Drive storage.
And, when Spotify finally does put some high-value content behind a paywall, I’m sure I’ll add Spotify Podcasts to my list of subscriptions.