Get Ready for a Spotify App Overhaul — With Lots of Podcast Real Estate

Spotify Podcast Concept by Spencer Camp

Spotify is testing a new version of its app that gives podcasts more prominent, according to a report on Friday.

Spotify hopes that the overhaul will make it easier for people to listen to podcast content on the platform.  According to a report in Bloomberg, the redesign features tabs at the top of users’ libraries displaying ‘Music’ and ‘Podcasts’ in a large font. Spotify is testing the new changes with a few users, but the redesign is not available to the public yet.

Spotify has invested over $400 million dollars in 2019 alone buying three podcasting companies.

The music streaming giant continues to invest in original podcasts, too. These podcasts are only available to subscribers of Spotify.

But this is a long, uphill battle.  Currently, iTunes is still the most dominant platform for podcasts, accounting for an estimated 60% of all listeners.  Spotify only accounts for 10-20% of listeners for the most popular podcasts.

The redesign will make podcasts easier to find, and is undoubtedly an effort to boost those percentage numbers.  Spotify Chief Financial Officer Barry McCarthy says that part of the problem is that there’s no search engine for finding podcasts. He says Spotify is hoping to address that issue.

“There is no search engine, no search interface that understands what podcast you and I like. We’re working hard on that problem.”

The increasing focus on podcasts might help Spotify offset the company’s recurring losses. More than 60% of Spotify’s revenues are distributed to music rights holders, opening a giant incentive for content diversification.

Spotify has apparently agreed not to push that number lower during recent negotiations with various industry stakeholders. Instead, the company is betting on original content that doesn’t pay royalties and drives subscription numbers higher.

McCarthy says the idea is to get users into their favorite podcasts in just two clicks instead of seven. The podcast revenue boom is still in its nascent stages, with revenues expected to reach $1.2 billion by 2020.