We reported yesterday on Spotify’s financial results, including breaking the news that the company had sold two thirds of its stake in distributor DistroKid for €144m. Its earnings call offered some more insight into Spotify’s current strategy.
“Not only did we have our biggest quarter ever for ads in Q3, but 2021 will mark the first time we will surpass €1bn in ad revenue,” CEO Daniel Ek told analysts. “While this is a significant milestone, this business is accelerating with much more room to run.”
Ek noted that ‘traditional radio’ accounts for 46% of listening in the US, but 60% of audio advertising spend. “I think this clearly shows that we have plenty of room to grow both in listening time and in our effective monetisation…” Ek also made a prediction about advertising’s future importance to Spotify. “Long-term, I believe at the very least, this should be 20% of our revenues. But it might possibly be a lot more than that 30%, 40% even over the next five to 10 years.”
Meanwhile, Spotify claimed it has now overtaken Apple for podcast listening in the US, citing internal data as well as figures from independent firm Edison Research. CFO Paul Vogel also told analysts that its Anchor app is used by more than 80% of new podcasters on Spotify “and our understanding is that Anchor has about 50% market share across the entire podcast industry in terms of usage”.