LOS ANGELES — Four months ago, the Swedish podcasting giant Spotify was in its own pop culture free fall.
Its CEO apologized to the employees for controversy surrounding popular podcaster Joe Rogan and faced questions about whether the company's heavy foray into podcasting was backfiring. Rogan himself also apologized, and several musicians including rock artist Neil Young demanded a boycott of Spotify.
But ultimately, Young's boycott did not have any substantial effect on Spotify's business. The streaming service grew subscribers in the first quarter, and even Rogan said he gained more listeners.
Instead of retreating, the company says it is doubling down on podcasting, continuing with a strategy that has propelled Spotify from an underdog in the audio medium to dominating its rival Apple, a pioneer in the space. The plan — continue building exclusive, original content through its owned podcast production companies and partnerships and creating enough tools and monetization capabilities to entice new audio creators to bring their podcasts to Spotify.
"With the investment and attention that Spotify has brought to the podcast business, I think it really has made it to a place that now you feel like the sky's the limit in terms of audience," said Julie McNamara, head of Spotify's talk studios, in an interview.
The goal, McNamara said, is to build a podcast library with exclusive original programming that has a mix of scripted narratives like "Batman Unburied" and shows licensed from podcast creators such as "Call Her Daddy" host Alexandra Cooper and Rogan. The platform will also be supported by other audio creators uploading their work to Spotify.
"The Joe Rogan Experience" has long ranked as No. 1 on Spotify's podcast chart, but for the first time ever this year it was overtaken by a Spotify Original, "Batman Unburied" for more than two weeks. The audio series from Spotify's deal with Warner Bros. and DC, tells the story of Gotham's crusader as he hunts for the Harvester, a criminal who eats his victims.
Its cast includes Hollywood talent Winston Duke from "Black Panther" as Bruce Wayne, comedian Hasan Minhaj as the Riddler and Gina Rodriguez from "Jane the Virgin" as Barbara Gordon. The podcast, which debuted May 3, ranked No. 3 on Spotify's U.S. podcast chart last week.
Spotify has more than 4 million podcasts on its platform and an estimated 32.5 million podcast listeners in the U.S. this year, about 26% of the market. Apple has 28.5 million podcast listeners, according to research firm eMarketer.
"We feel like we have all the tools in place to get us to the next chapter of our audio evolution [with] really big swings while we know we're also covered on the types of podcasts that current podcast listeners seem to really enjoy the most," McNamara said.
The television programming veteran joined Spotify last September as head of U.S. studios and video. She oversees Spotify-owned podcast production studios including Gimlet, Parcast and the Ringer and high-profile partnerships, including Meghan Markle and Prince Harry's production company, Archewell Audio.
A more recent success for Spotify is Parcast's "Scotland Yard Confidential," detailing crime cases handled by Scotland Yard. It ranked No. 18 on Spotify's U.S. podcast chart last week but was ranked as high as No. 2 after it debuted on May 19.
McNamara felt the show had global potential and built on Parcast's success with true crime stories.
"Obviously, 'Scotland Yard's' at the root of true crime and I think just having that turned on for me, and realizing that we need to think about this as Parcast as an international brand," said Max Cutler, Parcast's founder and Spotify's head of talk creator content and partnerships.
The recent successes have helped to blunt some of the criticism that Spotify didn't have much to show for its heavy investments in podcasting, which began in 2019 with the acquisition of podcast production companies including Gimlet and Parcast. The goal was to diversify the company's business and make it less reliant on music streaming.
Then came a flurry of high-profile deals including with Michelle and Barack Obama's production company, Higher Ground.
The results of those deals, however, have been mixed. Some podcasters, such as "Last Podcast on the Left," have opted to end their exclusive deals with Spotify.
Spotify said it opted not to renew its exclusive deal with Higher Ground when it ends later this year. It produced a handful of shows for Spotify, including "The Michelle Obama Podcast," which was its fourth most listened-to podcast in 2020. But there were some creative tensions with Spotify over how prominent the Obamas would be in the podcasts, compared with other voices that are not as well known, sources said.
Spotify executives said deals will be evaluated individually.
"We don't want to feel we're somebody's like sixth or seventh side hustle," McNamara said. "You want to feel that it's a priority to them ... and [they're] really committed to the form and excited about it and have something they want to say and do."
One of Spotify's most controversial podcast deals was Rogan in 2020. There was mounting backlash against Rogan this year, sparked when scientists and medical professionals asked Spotify to clarify its COVID-19 content moderation guidelines after raising concerns about vaccine misinformation on Rogan's podcast. The pressure mounted after Young and other musicians said they would pull their music from Spotify in protest.
Rogan apologized and vowed to be more mindful about providing counter-viewpoints on his podcasts. Spotify made publicly available its COVID-19 guidelines and said it would refer listeners to its COVID-19 information page on podcasts related to COVID.
"It was a great opportunity to talk to key partners and to listen and to learn from both creators as well as our employee base, and a lot of changes have taken place," Cutler said. "We've been very upfront about the guidelines now that are universal to all creators."
Ultimately, despite some people vowing to boycott or quit Spotify, the company said its monthly active users increased in the first quarter to 422 million, up from 406 million in the previous quarter.
"They have done a reasonably decent job differentiating their service with podcasting led by Joe Rogan," said Jeffrey Wlodarczak, a principal and senior analyst with Pivotal Research Group, in an email. "There was some controversy with his show earlier this year, but they seemed to handle that okay. Overall I think [the] move to podcasting made sense and still makes sense."
Still, as Spotify expands its podcasts, content moderation could be a challenge, analysts say.
The company over the years has hired more people to moderate the content on its platform but declined to state how many employees it has in this area. Users can report inappropriate content and Spotify uses technology to flag inappropriate content.
"As Spotify scales its podcast-first philosophy, they also need to scale the way that they adhere creators to their misinformation policy they put in place," said Kelsey Chickering, a principal analyst with Forrester Research.
———
