Spotify takes a bet on podcasts in a field dominated by Apple


Spotify is experimenting in new media to increase the time customers spend with its app, and boost advertising sales.
Spotify is experimenting in new media to increase the time customers spend with its app, and boost advertising sales.PHOTO: REUTERS

NEW YORK (WP) - Spotify is tiptoeing into new businesses again.

The No. 1 paid music streaming service has agreed to promote podcasts in its app and via ads on buses.

In return, the hosts of Reply All, Pod Save America and The Bill Simmons Podcast agreed to talk up Spotify on social media and during their shows, which cover topics from Internet subculture and politics to sports.

Spotify is testing whether to devote more resources to areas other than music.

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Podcasts are a fast-growing field currently dominated by Apple.

By increasing the revenue it gets from other media, Spotify could reduce the huge share of sales that goes to record labels.

Royalties accounted for more than 75 per cent of Spotify's costs last year and are based on the time users spend playing songs.

"The potential for Spotify is to introduce this calibre of storytelling to a much larger audience, who are already in a listening mindset," said Mr Matt Lieber, co-founder and president of Gimlet Media which produces Reply All.

Spotify is experimenting in new media to increase the time customers spend with its app - and boost advertising sales.

As of now, most consumers looking for music videos or podcasts leave Spotify for Apple and YouTube.

In particular, the company wants to assess awareness of its service among avid podcast listeners and could expand the campaign to more providers later this year.

In a survey earlier this year, about 15 per cent of Americans over age 12 had listened to a podcast in the past week, and about almost a quarter listened to at least one every month.

With more than 140 million users, including about 50 million paying subscribers, Spotify has an opportunity to steal share from Apple.

The company has already commissioned original podcasts about music, and partnered with Gimlet Media on a podcast series about the late Chris Lighty, manager of rappers Busta Rhymes and 50 Cent.

The episodes premiered on Spotify before becoming available on other services.