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Spotify (NYSE: SPOT) is expanding the distribution of The Michelle Obama podcast to new platforms after the conclusion of its first season. That means people keep listening to podcasts Appleis (NASDAQ: AAPL) The native podcast player or a host of other podcast players will soon see the “Spotify Exclusive” appear in the new rankings of the charts.
“Millions of listeners around the world have already welcomed The Michelle Obama podcast and we look forward to growing that audience as we build anticipation for the future Higher Ground series, “Spotify’s chief commercial officer of content and advertising Dawn Ostroff said in a press release.
Spotify is looking for a Breaking Bad moment.
Image source: Spotify.
What does Walter White have to do with it?
Breaking Bad received strong positive reviews during its first three seasons, but mostly fell under the radar of most American viewers in the late 2000s. It wasn’t until the first three seasons appeared on Netflix that the series began to increase its audience. At the end of the series, it was one of the most watched shows on cable television.
That’s what happens when you take great content and combine it with wide distribution.
Spotify certainly already has a wide distribution. It has about 300 million monthly active users on its platform. But those users come mainly for the music. Spotify still accounts for a small fraction of podcast listening. Podcast hosting company Libsyn says that about 60% of its distribution is through Apple’s podcast listening apps.
However, among those who listen to podcasts on Spotify, The Michelle Obama podcast it has been incredibly popular. It is currently ranked as the # 4 podcast on Spotify for listeners in the United States. And the podcast has consistently topped the list since its debut in July.
Expanding the popular podcast to other platforms with a much larger audience than Spotify could increase awareness of the podcast and Spotify as a podcast listening platform. When people search for season two, they might adopt podcasts on Spotify. It worked for Breaking Bad.
Podcasts are just starting on Spotify
21% of Spotify users listened to podcasts in the second quarter. That’s a 14% increase at the end of the third quarter of last year, the first time the company published the metric. Still, there is plenty of room to grow your audience.
Without a doubt, Spotify is trying many strategies and spending a lot of money on podcast content and technology. She bought the exclusive rights to Joe Rogan’s experience, the most popular podcast on multiple platforms and now the most popular on Spotify. He has an exclusive deal with Obama’s Higher Ground production company. And he has many other deals with celebrities and media companies with valuable intellectual property. Beyond content, Spotify is investing in technology. From authoring software to hosting to ad tech, Spotify has solutions for almost every part of the podcast industry.
And Spotify has good reason to push listeners to podcasts. You don’t have to pay royalties to music publishers, you can effectively monetize your audience, and you’ve improved engagement for all users who listen to podcasts. That last piece is currently the biggest driver of your results, but the other two pieces could become considerable sources of profit down the road if you continue to increase podcast listening on the platform.
Investors should not give up their exclusivity in the Michelle Obama Podcast as a sign of failure and an effort to get as much ad revenue as possible from other platforms. Quite the opposite. It is content strong enough to attract new users to the Spotify platform to listen to podcasts.
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