Australia markets closed
  • ALL ORDS

    7,605.20
    +76.20 (+1.01%)
     
  • AUD/USD

    0.7092
    +0.0036 (+0.51%)
     
  • ASX 200

    7,313.90
    +68.80 (+0.95%)
     
  • OIL

    71.53
    +2.04 (+2.94%)
     
  • GOLD

    1,779.70
    +0.20 (+0.01%)
     
  • BTC-AUD

    72,231.25
    +4,659.09 (+6.89%)
     
  • CMC Crypto 200

    1,324.45
    +64.29 (+5.10%)
     

Spotify says US podcast listeners now use its service more than Apple Podcasts

·5-min read

In September, analysts at eMarketer predicted Spotify was poised to overtake Apple Podcasts in U.S. listenership sometime this year. Today, Spotify announced for the first time it may have succeeded on that front. During the company's Q3 2021 earnings call, the company said that according to Edison Research and its own internal sources, it "recently became" the No. 1 podcast platform U.S. listeners use the most. Given the U.S. is the largest global podcast market, the milestone is significant and speaks to the sizable investment Spotify has made in podcasts over the past few years.

The company didn't break down its podcast listener numbers specifically, however. Instead, it shared its monthly active users overall grew 19% year-over-year to reach 381 million in the quarter, up from 365 million last year. Premium subscribers also grew 19% to reach 172 million, up from 165 million last year.

According to eMarketer's recent data, Spotify and Apple Podcasts have been neck and neck in terms of U.S. podcast listeners. Its analysts said last month Spotify would reach 28.2 million monthly U.S. podcast listeners by year-end, topping Apple Podcast's 28.0 million by a thin margin. (The firm had predicted these same numbers earlier in 2021, as well.) It forecast Spotify's number of U.S. podcast listeners would continue to grow to reach 43.6 million by 2025.

Reached for comment, Edison Research confirmed the podcast milestone is based on usage, not downloads.

The data is from the firm's second-quarter Podcast Consumer Tracker, its subscription service that covers the podcast industry. Respondents were asked "what platform or service do you use most to listen to podcasts?" and Spotify came in at No. 1, at 24% of weekly podcast consumers. This put it ahead of Apple Podcasts for iOS (21%) and YouTube (18%). Edison Research says its sample is in excess of 8,000 weekly podcast consumers. (Spotify is an Edison Research client.)

But without hard numbers from Spotify or Apple, it's hard to specifically confirm how close the race still is at this time.

Spotify attributed its podcast listenership growth not only to its content slate, but also to its product improvements.

"We started our journey three years ago in podcasting with a catalog of about 185,000 podcasts. And we were really nowhere, compared to the largest players in the industry. Today, we have 3.2 million podcasts on the platform, a growth rate of over 1,500%," noted Spotify CEO Daniel Ek. In the prior quarter, Spotify had 2.9 million podcasts.

"So why did we succeed this fast? Well, obviously our content investments have helped a great deal," said Ek. "But it's also another proof point of the impact our platform improvements and product innovations are having on our business overall. And the velocity of shipping matters -- from the recent launch of interactivity and enhancements like polls and Q&A, to the release of enhanced listening features and new original programming around the world. We fought hard to gain new listeners. And our success is not attributable to just one thing, but literally hundreds, if not thousands, of improvements that we're working on in parallel for the benefit of creators, users and advertisers alike," he said.

Ek said that the company's culture of innovation, which leads to an improved user experience, brings more creators to the platform to share their content. This in turn, brings more advertisers.

"And all of these things coupled together -- users, creators and advertisers -- unlock the power of our flywheel," he added.

However, Spotify's milestone in U.S. podcast listenership (which Spotify confirmed to TechCrunch had not yet been shared until now) comes shortly after a revamp of Apple's Podcasts app, which was criticized by creators and end users. Podcasters complained of bugs, errors and a confusing interface. Apple issued a fix for one critical bug related to automatic downloads in an update this summer, but the damage to its reputation may take longer to recover.

During the quarter, the percentage of monthly active users remained strong, Spotify said, and was up 20% year-over-year on a per-user basis. Podcasts' share of overall consumption hours also reached an all-time high in the quarter.

Meanwhile, podcasts are helping Spotify boost its bottom line. Spotify noted it had its biggest-ever quarter for ads in Q3, partially fueled by its growing podcast slate, and said 2021 would mark the first time it surpassed €1 billion in advertising revenue. It did not break out how much of its ad revenue is now generated by podcasts, but said its podcast advertising growth rate was "in the triple digits."

On the product side, the company released a number of updates to its podcasts platform in the quarter, including the launch of paid podcast subscriptions in the U.S., new interactive features for Anchor creators, expansion of its Music + Talk podcast format and video podcast support, among other things. It also released 32 new Originals & Exclusives, including "Armchair Expert" with Dax Shepard and "Call Her Daddy" in July, and announced a multi-year content partnership with The Ringer and WWE for original and exclusive content. Internationally, Spotify release 76 new Originals & Exclusives.

Overall, Spotify revenue was $2.9 billion in the quarter, up 27% year-over-year, with ad sales rising 75% to reach $374 million, at the top end of its guidance.

The company added that it had not been significantly impacted by the iOS privacy changes that had impacted other ad-supported businesses, like Snap and Facebook, as it had "a ton of first-party data" thanks to all its users being logged in.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting