On Spotify, white noise creators can make up to $18,000 per month recording ambient sounds meant for background listening. According to a recent report from Bloomberg, however, these podcast aberrations will no longer be eligible for specific ads.
Spotify has finally made the move to cut off white noise podcasters from its lucrative ads program, according to a new report. These ambient sounds account for 3 million daily consumption hours on the platform, after being boosted by Spotify’s algorithmic push for content with ‘talk’ vs. music.
Although Spotify had originally incentivized these curators and podcasters to join the platform, white noise took listeners’ time away from major artists. The more listeners play ambient white noise in the background, the more they stay out of the music ecosystem.
Realizing how much listener attention white noise podcasts were hoarding, Spotify is removing these podcasts from its self-funded Ambassador Ads program.
The Ambassador Ads program provides spots for Spotify that podcasters can utilize for promotions. The streaming behemoth compensates hosts to read out ads that will encourage more creators to join the platform. In particular, this funded ad-support through Spotify’s tools led to one division of curators discovering explosive success.
A Bloomberg report in June 2022 noted that via Spotify’s self-hosted podcast platform, white noise podcasters could earn as much as $18,000 per month. These earnings are generated primarily through ads that Spotify itself placed, in turn reducing Spotify’s annual gross profit by $38 million every year.
Since dubbed ‘Spotify’s $38 million white noise problem,’ the streaming giant is pulling the plug on these podcasts — which provide little in terms of actual ‘curation.’
Listeners play these sounds in the background to assist with mind clarity and focus, usually while working or studying. Spotify believes that the nature of white noise podcasts means their marketing dollars were ill-placed, because users did not engage in the session.
On Friday, the streaming giant sent an email to artists highlighting integral updates to its Ambassador Ads program.
According to the Bloomberg report, Spotify informed curators about the removal of white noise tracks from the program. Moreover, Spotify also lifted the eligibility requirement for the Ambassador Ads program that applies to conventional podcasters. Curators will now require 1,000 unique Spotify listeners over the past 60 days to qualify.
Modification to the program will take effect on October 1st. This decision directs the audience towards ‘comparable programming,’ making more ‘economic’ sense for Spotify’s bottom line. This decision is expected to increase Spotify’s annual gross profit by $38 million.
But Spotify isn’t pulling the plug on all revenue streams of white noise podcasters.
These ambient sound creators can still earn through paid subscribers, listener support, and automated ads with shows. However, Spotify will no longer allocate its budget to supporting them through Ambassador Ads.
There is chatter of a similar conversation happening elsewhere in the music industry. Universal Music Group’s CEO Lucian Grainge and Warner Music’s CEO Robert Kyncl have both voiced their displeasure at the disparity in royalty payouts. Both Grainge and Kyncl have suggested that a shake-up is due for the way royalties are calculated by streaming services.
Warner Music Group CEO Robert Kyncl criticized the fact that songs with ‘noise’ share the royalty pool with mega artists. Kyncl added, “An Ed Sheeran stream is not worth the same as a stream of rain falling on a roof.”
Last week, Spotify had also announced its plans to add more podcasts to participate in its automated ads program. This move would involve ‘the company inserting third-party ads into shows automatically, much like ads seen on YouTube.’ But on Friday, Spotify also clarified that it will ‘split the revenue on those placements in half with podcasters, versus the flat rate based on ad impressions that it has historically used.’