Spotify plans to monetize investments in podcasts through an audio advertising marketplace. Development remains in the early stages.
When complete, the Spotify Audience Network will let advertisers reach listeners through ad-supported music.
U.S. podcast ad spending will surpass 20% of digital radio ad spending this year and cross the $1 billion mark next year, according to eMarketer’s latest forecast. The most recent data released in August 2020 estimated spend in 2021 to jump nearly 45% to $1.13 billion.
Spotify's network introduced on Monday aims to support the company's original and exclusive licensed podcasts and podcasts hosted on its owned-and-operated Megaphone and Anchor.
Megaphone, a podcast monetization and publishing platform that Spotify acquired in November 2020 for a reported $235 million, works with about 20,000 podcast publishers like Slate, and ESPN. Anchor is the podcast creation, distribution and sponsorship platform Spotify acquired in February 2019.
In an update by Spotify management on Monday at its "Stream On" event, the company outlined several efforts expected in the coming months.
The company announced its plans for the Spotify Audience Network, along with its plans to launch in more than 80 new markets and add new plan options later this year. It also will launch new interactive features and content and partnerships for podcasts.
“The markets will launch with Spotify's core global music library, and the company will be working with local partners to grow the service's offerings over time,” wrote Aaron Kessler, analyst at Raymond James, in a research note published Tuesday. “These markets feature over 1B potential new users, over half of which have access to the internet.”
Spotify also will add support for 36 new languages to its platform, and a new subscription plan called Spotify HiFi, which will provide listeners with access to high-quality, lossless versions of music streams later this year in select markets.
Still to come are new tools and features for podcast creators focused on more interactive podcasts like enabling the addition of video content to podcasts.
Spotify also will allow Anchor users to add polls and Q&As to podcasts, and a new partnership with Wordpress that allows users to turn written content directly into podcasts, Kessler wrote.