Some are speculating that Spotify’s high-profile podcast investments will ultimately result in a lessened reliance on music and rightsholders. However, Warner Music Group (WMG) CEO Stephen Cooper has indicated that he views the Stockholm-based platform’s multimillion-dollar focus on podcasting as a positive.
Cooper offered his opinion of Spotify’s podcasting pivot during the conference call that coincided with Warner Music Group’s recently released Q3 2020 earnings report. Guggenheim senior media analyst Michael Morris inquired about how the leading music streaming service’s quickly growing roster of exclusive podcasts – including The Joe Rogan Experience, The Michelle Obama Podcast, and several upcoming programs from the DC Comics world – is affecting the “economic relationship” with WMG.
“We’re very happy that Spotify is investing in podcasting,” responded Cooper. “It gives them an opportunity to create another vertical that they can create not only an ad-free service around, but presumably, over time, a premium service.”
Furthermore, in addressing the idea that podcasting could potentially draw a significant number of Spotify users away from music, Cooper said: “I believe personally that there will be people that come to Spotify for a podcast and stay for music, and that there will be people that come to Spotify for music and stay for a podcast. … But hopefully, what it will do is create appeal to a broader audience.”
And during the latter portion of his answer, the 73-year-old Warner Music head reiterated his belief that the majority of Spotify’s nearly 300 million monthly active users (MAUs) will continue to use the platform largely for music. “I also believe that, that being said, that Spotify’s basic foundation stone or basic foundation will always be music,” he noted. “I don’t see that changing anywhere near the foreseeable future.”
Interestingly, another of the conference call’s questions concerned Warner Music Group’s possible willingness to sign and develop podcasters. Cooper specified that multiple WMG artists release podcasts presently and appeared to signal that he is open to closing deals in the sphere. But partially because “the economics of podcasting remain pretty opaque,” Cooper concluded, “we [WMG higher-ups] haven’t really found anything yet.”
In its own earnings report covering April, May, and June 2020, Spotify relayed that 21 percent of MAUs listened to podcasts – a slight uptick from Q1 2020’s 19 percent. The figure will presumably increase once The Joe Rogan Experience makes its Spotify debut on September 1st, with a further boost likely to arrive when the podcast becomes available exclusively via Spotify “later this year.”
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We’re very happy that Spotify is investing in podcasting,” responded Cooper. “It gives them an opportunity to create another vertical that they can create not only an ad-free service around, but presumably, over time, a premium service.”