The Ledger: Spotify beats SXM Media to Top Podcast Network Rankings

The Ledger is a weekly newsletter about the economics of the music industry sent to Billboard Pro subscribers. An abridged version of the newsletter is published online.

With the help of ratings juggernaut Joe RoganSpotify topped SXM Media — just barely — in Edison Research’s Q2 2022 podcast network rankings covering April 1 through June 30, after taking second place the previous two quarters.

The streaming company has made Rogan’s podcast, The Joe Rogan Experience, a cornerstone of its efforts to expand the audio platform beyond its musical roots. If Rogan’s role was to help turn Spotify into a podcast leader, he accomplished his mission. “Rogan’s not the only reason they’re No. 1, but he’s the main reason,” says Edison Research president Larry Rosin.

For all the controversies – from accusations of racism to Neil Youngrequires that Spotify pull his catalog over Rogan’s comments on COVID-19 — THREE has delivered an audience like no other podcast. Rosin compares Rogan to Aaron Judge, whose 57 home runs are 20 more than the second-leading hitter in Major League Baseball, and american idolas in his prime could have lost half its audience in the fifth season and still ranks among the top 10 shows on television. “It’s kind of what Rogan is to the rest of the field of podcasting,” Rosin says.

That said, Spotify’s lead over SXM Media is slim because networks regularly win and lose shows, meaning their market share fluctuates. “That’s part of what happened,” Rosin says. “SXM got a lot of shows out,” Exactly Right Media said switch from SXM Media to Amazon’s Wondery (with their flagship podcast, the No. 5-ranked My favorite murder). “That was really the difference,” he says. That was enough to allow Spotify to edge out SXM Media “by a small margin.”

Topping Edison’s podcast network rankings is a remarkable achievement for a music company pushing hard to build a broad audio platform. The company sees spoken audio as a necessary means to help deliver the growth Spotify’s investors expect. Not only can podcasts help attract and retain subscribers, but they can also provide additional advertising revenue. As its podcasting business scales, it can improve the music margins surrendered to record label licensing deals. In Spotify June 9 investor presentation, Spotify executives said the company can achieve podcast gross margins of 30-35% within three to five years and sees 40-50% as achievable further into the future. In 2021, Spotify’s podcast business left a $103 million negative impact on gross margin.

Spotify has spent handsomely on podcast-related acquisitions for content creators The Ringer, Parcast and Gimlet and technology platforms Anchor and Megaphone. It does not include exclusive license agreements for THREE, Call her dad, Barack and Michelle Obama‘s Higher ground (Which one left for Amazon’s Audible in June), DC comics and other.

SXM Media is the sales organization of SiriusXM Holdings Inc. and covers three companies: SiriusXM, Pandora and Stitcher, a podcast platform. It has some of the most popular podcasts in the US, including the #2 Crime junkie, No. 10 Office ladies, No. 11 Dateline NBC, No. 18 Pod Red America and no. 23 WTF with Marc Maron. In total, SXM Media has seven of the top 30 podcasts in Edison’s Q2 2022 rankings.

Spotify has only two shows in the top 30: The Joe Rogan Experience and Call her dad. But both shows are in the top 10 – Call her dad is no. 8 – and Spotify have both exclusively through lucrative licensing agreements. It has another podcast in Edison’s top 50: Answer allfrom Spotify-owned Gimlet, which is at No. 49.

But for Spotify, success in podcasting isn’t necessarily reflected in its position on Edison’s podcast rankings. Spotify needs a wide variety of shows to be interesting to ad buyers, he says James Cridlandeditor of Pod newsin an e-mail to Billboard. “Total time spent listening is important when it comes to revenue, and that’s something Edison Podcast Metrics doesn’t measure.”

This is where Spotify’s acquisition of Anchor (in 2019) and Megaphone (in 2020) comes into play. Anchor gives creators tools to create their podcasts; Megaphone distributes podcasts and sells advertising. In June, Spotify had over 4 million podcasts on its platform, up from 500,000 in 2019, and 75% of them come from Anchor, said Maya Prohovnik, Spotify’s head of talk verticals, at the investor presentation on June 9. By owning two podcast hosting companies and publishing a wide variety of shows, “Spotify has access to both the big hits and the breadth of content that will help them achieve both a high number of the total audience and a wide variety of different shows,” says Cridland.

Just as hit-focused major labels have built businesses around the sale and distribution of music’s long tail, Spotify is leveraging the value of podcasting’s sea of ​​niche and less-than-mainstream content. In May, Edison found that more than half of all listening in the top thousand podcasts happens in the top 100. “That doesn’t mean they’re not avid audiences,” Rosin wrote, “and it certainly doesn’t mean they’re not an audience that can make money from.” Outside of the top thousand podcasts are hundreds of thousands of creators with millions of episodes. Each title on its own has a small audience, but collectively they can make a noticeable difference to Spotify’s bottom line.



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