Spotify unveiled its plans to supercharge its video podcasting sector at its Now Playing event last week, as engagement with video podcasts and Spotify’s profitability both continue to grow.
The number of video podcast series on Spotify has now topped 300,000, and more than 250 million users have watched video podcasts on the platform.
“We have been steadily investing in video because of its growing popularity on our platform, and we’ll always focus on things that we believe will make Spotify an even more powerful destination for creators and listeners,” said Maya Prohovnik, Spotify’s vice president of podcast product.
Press play: Spotify's pivot to video
Spotify revealed a new slate of tools last week aimed at boosting the growth of video podcasts on the platform.
Spotify is adding a number of features to make its video experience more user-friendly, including personalised video recommendations, thumbnail scrubbing, and a comments section.
Users will be able to stream videos in both the foreground and background of the app. “They can begin an episode while getting ready for the day, watching in the foreground before slipping their phones into their pockets to continue listening in the background as they commute,” according to Spotify.
The platform also introduced its new Spotify Partner Program, which would give podcasters a share of the revenue for every advertisement Spotify adds to their content. Premium Spotify subscribers will no longer hear ads, and the platform will instead pay creators based on their number of streams.
Spotify CEO Daniel Ek said Spotify’s expansion into video podcasts was spurred by its deal with Joe Rogan, who renewed his podcasting contract with the platform for US$250 million this year. “Rogan had a video podcast, and as he was coming onto Spotify, he said, ‘I want to bring the video podcast,’” according to Ek. “Then the numbers started growing. And then other people said, “I want that, too.”
Spotify will also allow podcasters to upload videos up to 90 seconds long, similar to TikTok, YouTube Shorts, or Instagram Reels. This feature has already launched in beta in markets like the United States, the United Kingdom, and Australia.
However, “our goal is not to make our platform yet another place to watch short-form content,” Spotify said this month. The platform will only permit creators to upload one short video for every podcast episode, with the goal of funneling viewers to listen to podcasts.
“The consumption of Spotify tends to be more longform because people tend to go in and out,” Ek said. “The default experience of these other platforms is you sit there and are glued, which also means disrupting all your other experiences.”
Azzet has contacted Spotify for comment.
Smart shuffle: Spotify’s first profitable year
2024 may be Spotify’s first full year of profitability, following the release of its third quarter earnings last week.
"The company is on track for its full-year profitability, which is a very important milestone that investors have been waiting on for us for a long time," Ek told Reuters.
Spotify previously posted frequent quarterly losses, including an operating loss of EU€75 million in Q4 2023.
The company’s Q3 earnings reported that its monthly active users grew to 640 million, with 252 million net paying subscribers. Guidance for next quarter sits at 665 million active users and 260 million subscribers.
Overall revenue reached EU€3.99 billion, slightly lower than expected, due to weaknesses in the digital advertising market.
“We will close out Q4 just as we started the year — laser-focused on monetisation and the underlying fundamentals of our business,” Ek said on an earnings call. “Looking at our forecast, we expect to make further progress across all of our key metrics, which sets us up with plenty of runway for growth and profitability expansion in the years to come.”
Fast forward: Spotify’s other plans for the future
Spotify has also been adding artificial intelligence features, in keeping with the AI wave sweeping technology companies.
The platform released an AI DJ feature in 2023, which offers a personalised playlist to each user based on their listening history.
“The future clearly will be one where [Spotify’s AI features] will react instantly to what you’re saying and will respond back,” according to Ek.
Spotify co-president Gustav Söderström said this week that Spotify is open to hosting AI-generated music. “If creators want to use A.I. to enhance their music, as long as we follow the legislation and copyright laws, we want them to be able to monetise their music and pay out, right?”
However, he added that the streaming service would not create its own AI music, saying: “I don't think it's our job to generate that music instead of the creators.”
Spotify’s (NYSE: SPOT) share price closed at US$470.70, up from the previous day’s $470.01. Its market cap is $95.12 billion.