Spotify CEO Daniel Ek says the streaming audio giant is going to be “very diligent”; in assessing future investments in podcasting as many of the company’s rich talent deals come up for renewal.
Speaking on the company’s first-quarter earnings call, Ek answered a question from a Wall Street analyst about plans for potentially costly renewals this year and next. During the period that Don Ostroff was spearheading content, Spotify spent over $1 billion acquiring podcast assets and locking down exclusive deals with the likes of Joe Rogan and Dax Shepard. Ostroff left the company earlier this year, and his responsibilities have been taken over by Alex Norstrom, whose specialty has been the free, ad-supported side of the business.
One said, “You’re right about overpaying and overinvesting and I can start by saying we’re not going to do that.” “We are going to be very diligent about how we invest in future content deals and we will renew the ones that are performing and the ones that are not performing we will obviously take them on a case by case basis. Will see on the basis. relative value. We have very sophisticated tools to measure impact on the platform.” Those tools, he added, help the company set an appropriate budget for content.
One addition, market share also helps. “Because we are now the largest podcasting platform, it means we have an opportunity to refine on a larger basis,” he said. “So, relative to someone who is smaller, we should be in a better position should we want to renew a deal.”
The podcast business isn’t profitable yet, though CFO Paul Vogel reiterated his outlook for profitability in the next 12 to 24 months.
In the quarter ended March 31, Spotify more than doubled Wall Street’s expectations for new premium subscribers in the first quarter, adding 5 million to reach 210 million globally. Analysts were expecting 2.2 million customer additions. The streaming audio company also beat estimates for monthly active users, a large category that also includes free listeners, coming in at 515 million.
Spotify reported a 14% year-over-year gain in revenue during the quarter, to $3.04 billion, but the top line fell 4% from the fourth quarter as the company faced a softening advertising market.