The podcast industry is moving, the open podcast system that stood for many years is no more, and the leader in front of it all is, without a doubt, Spotify.

Historically, the podcast market held as the leading free way to listen to broadcasting. Over time this open system has been streamlined. Spotify made many purchases into podcasting businesses, including Gimlet Media, Anchor, Parcast, and the Ringer. Just last year, Spotify made exclusive agreements with several podcast giants, including exclusive rights to the most downloaded podcast in the world at the time, the Joe Rogan Podcast.

Since seeing significant success in investing in Joe Rogan’s podcast, Spotify has gone all-in on exclusive/original content and podcast creation. So much so that the company recently revealed a new content monetization tool for its creators, allowing for paid podcast subscriptions. This latest tool should attract new creators to the platform and allow Spotify to increase its massive lead in original/exclusive content, 140+ shows, compared to Apple’s less than ten total exclusive/original shows.

Apple and Spotify are compared here because these two services have the most reach on paid users.

Everyday Content Bingeing Now Includes Podcasts

Podcasts’ popularity is spreading. According to the Wall Street Journal, an estimated 116 million Americans, or 41% of the U.S. population over 12, are now monthly podcast listeners. That is an 11% increase over last year, according to Edison Research and Triton Digital.

In an earnings report, Spotify said that 25% of its active monthly users engaged with podcast content in Q4, up from 22% in Q3 2020. Podcast consumption hours in Q4 have nearly doubled since Q4 2019.

This is great news for Spotify because, as of current record, Spotify is a leading podcast platform, hosting over 2.6 million+ podcasts compared to Apple’s 2 million+ podcasts hosted.

This data all fits comfortably for Spotify. When Statista compared the most commonly used apps for listening to podcasts, Spotify ranked as the top app for the listening market, with a 25% use-case for listening to podcasts.

Spotify as an Investment — Analysis

As I wrote before, Spotify still very much has an uphill battle to become the global leader in audio entertainment. Comparing the graph to one from 2018, it can be seen that a massive shift has occurred in the last two years. Apple has lost over 30% of the listening market share, while at the same time, Spotify has only gained 6%. Their strategy to acquire as much high-quality podcast content as quickly as possible looks to be working.

Other technological superpower competitors are entering and gaining market share, but Spotify’s aggressive content strategy in the podcast market will differentiate and further its success from its competitors. Supporting the content strategy by allowing its content creators to create subscriptions to their shows effectively creates a new revenue stream.

Combining the new subscription revenue strategy and Spotify’s exclusive content revenue strategy allows it to diversify its platform in ways subscription content services like Netflix can only dream of. It will enable Spotify to work as a production company like Netflix to serve originals/exclusive content to its users with each new subscription dollar the platform receives. And it also allows Spotify to act as the podcast content mediator (think the Apple app store) for reaching new users, of which it can take a percentage of each new subscription.

This article has been reprinted with permission from Hayden Barnes’ page.