Will Spotify’s big bucks spent on podcasts pay off?

The Canadian Podcast Listener survey polled Canadians about the impact of Spotify's Joe Rogan deal – and how it could affect overall platform use.
Rogan

SignalHill Insights (formerly known as Audience Insights) has released a mini-report from the Spring 2020 Update of its Canadian Podcast Listener. The brief survey was in field at the end of May.

Among the questions and insights gathered were reactions to the recent multi-year contract between Spotify and The Joe Rogan Experience, which saw Spotify become the only program with the rights to Rogan’s podcast.

More than one fifth of Canadians who have listened to podcasts in the year have either watched (on YouTube) or listened to The Joe Rogan Experience in the past month. An even larger group of podcast listeners – one third – say they have never heard of the show, even with all the buzz around the mega deal. But that one-fifth of podcast listeners still make it the most popular single podcast measured by the annual study.

The podcast skews to a younger audience with 27% aged 18 to 34 and 29% male vs 13% female. Its huge audience is more than three times the reach of the next-most popular podcast in The Canadian Podcast Listener 2019 survey.

The deal, widely reported to be around $100 million, is not the first time Spotify has put big money into its podcast business. In 2019, Spotify spent $400 to $500 million acquiring podcasting companies. It redesigned its music-focused app to be more inclusive of podcasts.

Companies like Spotify are gobbling up podcasts as a route to profitably. Licensing fees for music – roughly $7 out of every $10 going to music labels, artists ad managers – cut into the profitability of music streaming. Other companies, including Montreal-based Stingray, are also moving in the podcast end of the business. In March of this year it acquired a 30% stake in The Podcast Exchange (TPX) of Toronto, a podcast sales and production house.

The Canadian Podcast Listener study from SignalHill Insights is produced in partnership with Ulster Media with the sponsorship of The Podcast Exchange (TPX).

Jeff Vidler, president and founder of Signal Hill, says, “We see the massive reach of The Joe Rogan Experience podcast. A total of 21% of past-year podcast listeners said they listened to the JRE in the previous month, which extrapolates to 8% of the Canadian population. That’s an audience the size of Vancouver. Recognizing that Spotify clearly has other strategic benefits up its sleeve with the Rogan deal, it’s also interesting to see the potential loss of some of that reach by going exclusively to Spotify.”

The survey did find that Spotify exclusivity is likely to shrink Joe Rogan’s base (exact audience numbers are difficult to track on any podcast due to the different consumption methods, but his YouTube videos average more than two million views per episode), although it’s still something of a hypothetical scenario since Spotify will only exercise its exclusivity at the end of the year. Listeners to The Joe Rogan Experience are much more likely to say they would listen/watch less (18%) or stop listening/watching altogether (23%) than access the show more often (16%).

Audience loss is likely to be steepest among listeners who frequently access their podcasts on YouTube, with fully half saying they will either listen/watch less often or stop listening/watching altogether, for a net impact of -39%.

Overall, Vidler says the magic of podcasts is that the people who listen to them can be engaged when their eyes are busy but their mind is free. He says one of the things that is contributing to the growth of podcasts is the predominance of smartphones. “The more people that use smartphones and take them around with them, the more opportunity they have to listen to audio. It’s 50 years since people carried transistor radios, 30 years since they carried boom boxes. Now they have the phone to listen to and have a choice in what they listen to – streaming, podcasts, radio. That’s part of why there’s growth in overall audio consumption.”