When Spotify announced it was investing over $300 million in exclusive podcast content earlier this year, shareholders were skeptical. Spotify’s CEO, Daniel Ek, assured them it was a good investment based on forecasts that 20% of Spotify consumption will be non-music related in the coming years. As it turns out, all bets seems to be paying off.
After recently moving the Spotify for Podcasters tool out of beta, podcast streaming rates grew nearly 40% on the platform, as compared to last year. With over 500,000 podcast titles hosted on Spotify, paid subscriber counts are up too: from 108 million to 113 million.
Not only are Spotify subscriber counts at an all-time high, profits on the up-and-up with projections to keep growing. Quarterly revenue for Spotify grew 28% to $1.9 billion. The SPOT stock is now up 25% for the year.
“We made the strategic bet that music and podcasts are additive and that users would enjoy having podcast as part of their Spotify experience,” CEO Daniel Ek said on a call with analysts. “We’re seeing evidence that this step is paying off with signs of increased engagements and higher conversion rates from free to paid.”
In a public shareholders letter to shareholders, Spotify provided some key insights into their recent growth. Spotify strategically shifted its focus from promoting original content to Spotify For Podcasters and Spotify for Artists, which is up 465,000 monthly active artists. As a result, Spotify reached 248 million monthly active users in the three-month quarter period. The letter also shares Spotify’s confidence against its major competitor, Apple Music:
“Relative to Apple, the publicly available data shows that we are adding roughly twice as many subscribers per month as they are,” the report reads.
H/T: Business Insider.