10 hours of white noise… for losing sleep. Spotify recently considered taking the aux away from white-noise podcasts (popular for sleeping and studying), Bloomberg reported. The streamer said that barring users from uploading rainfall on tin-roof soundscapes could boost its yearly gross profit by $38M (some white-noise podcasters have pulled in $18K/month in ad revenue). At the root of the issue: Spotify’s own algorithms.
Boost to bust: Spotify’s algos prioritized “talk” content over music, but a lot of white-noise tracks are released as podcasts. The algo boost helped white-noise pods garner 3M daily listening hours.
Siding with sound: Spotify ultimately decided to let white noise stay, though some creators have complained their episodes are disappearing, costing them tens of thousands of daily listeners.
“Cricket sounds” on the pod charts… next to “Armchair Expert.” Noise-pod popularity has frustrated record labels like Warner Music and Universal Music. Music execs are miffed that artists like Ed Sheeran are paid out of the same royalty pool as ocean-sound podcasters. It’s also annoyed Spotify, which has invested $1B+ in podcasting since 2019 to become a leader in premium content. But total US podcast ad revenue reached only $1.8B last year. While the pod-palooza boosted engagement, Spotify is still unprofitable.
Turning up the volume can make it tough to focus… Just a few years after acquiring distribution app Anchor (which hosts 44% of all podcasts) and striking a $200M+ deal with Joe Rogan, Spotify has pulled back from pods as it tunes to profitability. This year, Spotify had layoffs in its pod division and lost big shows from creators like the Obamas. Now it’s reining in efforts to become the “HBO of podcasting” and allowing itself to become more like the “YouTube of audio.”