Spotify has officially acquired Podsights and Chartable, a pair of podcast technology companies, as part of its long-running effort to monetize spoken-word entertainment. This acquisition hints that Spotify is focusing more on podcasts.
According to Spotify, these investments will impact advertisers and growth for podcast publishers, including AdLarge, the Wall Street Journal, ViacomCBS, etc. Read the article in-depth to know why Spotify acquired Podsights and Chartable.
The Stockholm-based platform unveiled these latest investments, which include purchasing several podcasting businesses and exclusive rights to many programs. Four-year-old Podsights is an industry leader in podcast insights and offers agencies and brands valuable attribution and performance measurement.
Conversely, the five-year-old Chartable provides podcast analytics and attribution tools. It serves 1.1 billion downloads each month per its website. Acknowledging that U.S. digital audio advertising revenue is expected to touch the $8 billion line by 2025, including more than $2.7 billion for podcast advertising, Spotify accentuated the perceived significance of optimizing advertising capabilities to capitalize accordingly.
Podcast Advertising Measurements to Dive into
Most advertisers prefer advertising on the music streaming platform to reach engaged audiences. However, the company faced challenges in attribution and measurement for podcast advertisers. Spotify plans to solve this issue by acquiring two podcasting-focused analytics companies.
As part of Spotify, Podsights will help utilize Spotify’s intelligence and technology to bring actionable insights and accurate measurement to podcast advertisers globally.
It makes it easier for Spotify to help advertisers understand how podcast ads drive actions that matter for their business. Over time, the streaming platform will extend these measurement capabilities beyond podcasts to the full scope, including audio ads within video, display, and music ads.
Chartable will combine its audience insights and promotional tools, SmartPromos and SmartLinks, with Megaphone so that podcasters can quickly be informed regarding their listener base and boost their business. Megaphone has acquired Whooshkaa, which enables radio broadcasters to convert their programming into podcasts.
The acquisition is wise for the Swedish-American audio streaming and media services provider. Spotify is trying to become a top player in the “hearing” attention economy as well as create a sizable advertising business. Podcasts are essential for streaming businesses as they cost less investment and enable a company to keep a significant profit in its pocket.
Additionally, it helps share the revenue with record labels with a draconian hold over the company. They get around 70 cents from Spotify. The streaming platform considers music as lead generation and tries to grab more attention as the streamers want access to more music and channels than any audio form.
It’s found that podcasts are present, whereas AI-generated sounds and audiobooks are the future. The number of people glued to Spotify’s stream increases the chances of selling some advertising against it. However, advertising-monetized attention does not discriminate among Neil Young, Joe Rogan, Michelle Obama, or machine-generated lo-fi sounds.
Spotify users have access to over 3.6 million podcasts as of Q4 2021. The number is up from 3.2 million compared to the previous year and has the potential to zero in modestly popular shows’ niche audiences that can appeal to certain advertisers.
Improved advertising services and insights increase the revenue of popular programs, including “The Joe Rogan Experience,” which attracts around 11 million listeners per episode. Unlike interview-focused TV shows and prominent podcasters like Call Her Daddy, Wild Ride! Each JRE installment spends multiple hours with Steve-O and The Always Sunny Podcast. The comedian’s sit-downs with Ted Nugent and Snoop Dogg neared the four-hour mark.
The purchase of Chartable and Podsights of Spotify is similar to Facebook’s acquisition of mobile analytics company Onavo, the VPN/data tracker. The social networking app paid $200 million for the company, which allowed it to collect deep intelligence into what was occurring within different apps, who was hot, and what would be desirable.
The company enabled Facebook to figure out the potential of Snap before its founders knew what they had in their sack. The company’s data was crucial while making deals with WhatsApp and Instagram, among other things.
Similarly, Chartable and Podsights will enable Spotify to know which podcasts are compelling, have tailwinds, and get famous shortly, providing them the best opportunity to lock up that content into exclusive deals.
The platform can use this data to create podcasts like Netflix, which makes the copy of popular hit shows on other platforms. As Spotify controls the “attention spigot,” it can help the company direct in-house podcasts and generate more revenue.
Spotify unveiled the features for streaming ad insertion last year, enabling the company to unlock podcast ad buying in self-serve ad platform Ad Studio, and launched the Spotify Audience Network. In this advertising marketplace, advertisers connect with listeners consuming a broad range of content.
The main point is that audio content and podcasts are crucial for Spotify, as Google and Apple find it a “nice to have feature.” Apple never took podcasting seriously, but Spotify is continuously making efforts to improve by determining how and what streamers listen to on the platform.
Netflix and Spotify founders Reed Hastings and Daniel Ek have learned from Mark Zuckerberg that attention is a zero-sum game. Use it to grow your business and stay ahead of competitors if you have it.
The Sweden-based company has invested in two companies to boost its podcasting business, and these purchases will offer more tools to podcast publishers and advertisers. It’s always little things that have a significant effect.
The music streaming company has been in the headlines recently due to Joe Rogan’s podcast, in which critics spread pandemic misinformation. This backlash led many artists, including Neil Young, to pull their content from Spotify’s catalog in protest. However, the criticism has yet to impact Spotify’s broader plan to acquire podcast technology, as the company believes the medium can potentially push revenue in the longer term.
Frequently Asked Questions
1. Why did Spotify acquire Podsights and Chartable?
Spotify acquired Podsights and Chartable as part of its strategy to strengthen its position in the podcasting industry. These acquisitions allow Spotify to enhance its advertising capabilities and provide better insights and measurement tools for podcast advertisers. It enables the platform to offer advertisers and podcast publishers more value, ultimately helping them monetize spoken-word entertainment effectively.
2. How do Podsights and Chartable benefit Spotify’s advertising efforts?
Podsights and Chartable bring valuable attribution and performance measurement tools to Spotify’s advertising ecosystem. Podsights, for instance, provides actionable insights and accurate measurement for podcast advertisers. This helps advertisers understand how podcast ads impact their business, improving the effectiveness of advertising campaigns on the platform.
Chartable complements this by offering audience insights and promotional tools, allowing podcasters to understand their listener base better and grow their businesses. These tools enhance Spotify’s advertising services, making it more attractive to advertisers and podcast creators.
3. What is the significance of these acquisitions in the podcasting industry?
These acquisitions position Spotify as a key player with advanced advertising and analytics capabilities in the rapidly growing podcasting industry. As podcast advertising revenue is expected to grow significantly in the coming years, Spotify aims to capture a substantial market share. These acquisitions reflect Spotify’s commitment to podcasting as a crucial part of its business strategy.
4. How does Spotify plan to use the data from Podsights and Chartable to its advantage?
Spotify can leverage the data and insights from Podsights and Chartable to identify trends, popular podcasts, and emerging content creators. This information lets Spotify decide about exclusive content deals and in-house podcast production. Like how Netflix creates original content based on viewer preferences, Spotify can use this data to generate podcasts that resonate with its audience and generate more revenue.
5. How does Spotify’s focus on podcasting compare to other streaming platforms like Apple and Google?
While Apple and Google offer podcasting features, Spotify is taking a more proactive approach to becoming a leader in the podcasting industry.
Spotify recognizes that podcasts significantly drive user engagement and advertising revenue. In contrast, Apple and Google consider podcasting more of a secondary feature. Spotify’s podcasting technology and exclusive content investments demonstrate its commitment to this medium.
6. How does Spotify plan to use these acquisitions to enhance its advertising services?
Spotify intends to extend the measurement capabilities it gains from Podsights and Chartable beyond podcasts to its entire advertising ecosystem. This includes audio ads within video, display ads, and music ads.
By offering advertisers comprehensive insights and measurement tools, Spotify aims to attract more advertising revenue and provide a more attractive platform for advertisers looking to reach engaged audiences.
7. Has Spotify’s recent controversy with Joe Rogan affected its podcasting strategy?
Despite recent controversies surrounding Joe Rogan’s podcast on Spotify, the company remains committed to its podcasting strategy. The acquisitions of Podsights and Chartable are part of Spotify’s broader plan to expand its podcasting business and monetize spoken-word content effectively. The company believes that podcasting can drive revenue in the long term, and it continues to invest in this area.
8. How many podcasts are available on Spotify, and why is this significant?
As of Q4 2021, Spotify offers access to over 3.6 million podcasts. This is significant because it allows Spotify to cater to a wide range of niche audiences and advertisers. With improved advertising services and insights, Spotify can increase the revenue potential for popular and niche podcasts, making the platform attractive to diverse content creators and advertisers.
9. How does Spotify plan to compete with other streaming platforms in the “attention economy”?
Spotify aims to compete effectively in the “attention economy” by investing in podcasting and exclusive content. By offering various engaging podcasts and using data from acquisitions like Podsights and Chartable, Spotify can capture and retain user attention. This approach aligns with the lessons learned from industry leaders like Netflix, which has demonstrated the value of creating content that keeps users engaged and loyal to the platform.
10. What does the acquisition of Podsights and Chartable mean for Spotify’s advertising and podcasting business in the long term?
The acquisition of Podsights and Chartable reinforces Spotify’s commitment to becoming a significant player in the podcasting and advertising industries. These acquisitions provide valuable tools and insights to help Spotify attract advertisers, retain content creators, and grow its podcasting business. In the long term, Spotify aims to capitalize on the podcasting medium to generate significant revenue and maintain its competitive edge in streaming and audio content.