For one, if it convinces people to listen to all of their podcasts on Spotify, the potential for advertising revenue is a lot higher than what Spotify is getting from direct listens of that specific show, especially when looking at a multi-year time horizon. However, what a lot of investors aren't considering are the indirect benefits of bringing a show like Call Her Daddy to Spotify. This may look low relative to the $20 million Spotify is shelling out to make the show exclusive each year. If the show averages three million listeners a week, at a $50 CPM (the dollar payout per thousand ad impressions, the standard measurement in podcast advertising), that is $150,000 in sales per week, or $7.8 million annually. It can then make money directly off these programs by getting them on its new advertising platform called the Spotify Audience Network.įor example, let's look at the recent Call Her Daddy deal, which is for three years and $60 million.

The obvious reason Spotify would sign exclusive deals is that it wants the listeners of these shows to move from other podcast apps to Spotify. Investors have to evaluate whether the company will get a strong return on these investments - here's how management is likely thinking it can make money on these deals. Spotify is investing tons of money to get shows onto its platform. Most recently, the company announced it has signed Dax Shepard's Armchair Expert and Alexandra Cooper's Call Her Daddy, the 18th and 15th most listened-to shows in the country, respectively, to go exclusive on Spotify this summer. It has also signed Barack and Michelle Obama, Kim Kardashian, and Prince Harry and Meghan Markle to podcast deals. The momentum started with a two-year, $100 million deal to bring The Joe Rogan Experience, the most listened-to podcast in the United States, exclusively to Spotify starting last December. In 20, it looks like the company was just testing the waters with this exclusive strategy, but in 2020, its pace of exclusive deals has started to increase. One of the most high-profile deals was The Joe Budden Show, which signed with Spotify in 2018 but has since moved off the platform due to payment disputes. The exclusive strategyĪ few years ago, Spotify started signing podcasts to go exclusive on its platform.

Spotify deals