Nevertheless, Ek said he believed the podcast business could see gross margins between 40% to 50% over the next five years.Įk said that audiobooks could ultimately provide similar margins to podcasts if the company can build a marketplace of creator tools around them. According to CFO Paul Vogel, Spotify’s podcast business had negative gross margins of 57% last year and losses will peak in 2022. Even as Spotify’s podcast biz has grown significantly, it’s still not profitable. It said about 30% of Spotify’s user base, or roughly 125 million monthly users, listened to podcasts in the first quarter of this year, which represented 7% of total listening hours on the platform during the period.ĭespite the success of Ek’s strategy around podcasts, some are still skeptical of Ek’s lofty promises. The convenience of being a one-stop shop for all streaming audio needs is a major value proposition for Spotify. Spotify’s massive user base is its greatest advantage, and management expects that base to grow to a whopping one billion globally by 2030. With a slew of exclusive podcast deals, Spotify was able to grow its podcast biz among its 422 million total monthly active users, as of the end of Q1. Fast forward to 2022, and Spotify has the biggest market share in the U.S. When the streaming giant jumped into the podcast business, Apple Podcasts was the largest player, and many had doubts then, too. Participants also have listened to audiobooks on, which is owned by Swedish audiobook streaming group Storytel, and Google Audiobooks. But there is some competition in the space, and the current market leader is Amazon-owned Audible, according to the survey. In addition, only about 12% purchased an audiobook in the past month, and 13% currently have an audiobook subscription.ĭespite the lack of active usership currently, there is solid growth potential for Spotify. population, with only 23% of respondents surveyed having listened to an audiobook in the past month.
And while 7% may seem small, that does represent about 16 million Americans-or about half of number of current subscribers.Īudiobooks have yet to gain mass popularity among the U.S. Among those who do not currently have an audiobook subscription, or about 87% of the population, 7% are definitely/probably going to sign up for an audiobook subscription in the next 12 months. The survey, conducted among more than 1,500 American adults between June 17 and June 19, found that the number of audiobook subscribers could grow by up to 50%. The Most Anticipated Streaming Titles of 2023
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