Spotify users who opened the app on July 29 were met with a notification of a noteworthy new podcast. Former first lady Michelle Obama’s new Spotify-exclusive show, simply titled “The Michelle Obama Podcast,” had released its first episode - an interview with President Barack Obama.
But the former First Lady's podcast isn’t the only one of its kind. Spotify has spent the majority of 2020 so far stacking up a series of high profile exclusivity deals as part of a broader goal of dominating the podcasting market. Those deals, plus a series of acquisitions over the last year and a half, show that Spotify doesn’t just want to be where you go to listen to music. It wants to be your only app for audio content - period.
But are these expensive deals worth it? Recently we looked at Twitch’s record of making similar deals and found that they do little to drive viewership and new users. To see how they fare for Spotify, we’re looking at these four major exclusivity announcements and their impact on Spotify’s metrics:
- Acquisition of The Ringer network, announced February 5
- Joe Rogan, announced May 19
- Kim Kardashian West, announced June 17
- Michelle Obama, announced July 16 and released on July 29
So how did these deals help or hurt Spotify?
The answer is mixed. Facebook ‘Talking About’ counts show that some deals have generated more conversation than others, though there is a marked increase in discussion about Spotify overall since March.
But that general increase may be more attributable to COVID-19 than Spotify’s exclusivity deals overall - After all, The Ringer’s network of shows was brought in back in February but failed to generate much interest.
Joe Rogan’s deal to bring his wildly popular podcast to Spotify was the starting bell to go all-in on exclusivities and was hailed as a massive move for Spotify, but even Rogan’s massive appeal did little to immediately increase buzz. Talking About count increased by 2,000 after the announcement, and while the average talking about count did increase throughout the rest of May, the further you get from the announcement date the harder it becomes to attribute the growth to the deal with Rogan.
Kim Kardashian West’s exclusivity deal to produce a podcast about her work with The Innocence Project hardly made a blip. In fact, Talking About counts significantly dropped shortly afterwards. This isn’t a sign that people hated the Kardashian deal - as hate still generates discussion - but rather that people were utterly indifferent.
Michelle Obama’s podcast, however, is the strongest sign for Spotify that high-profile exclusivities may be a worthwhile investment going forward. Talking About counts increased by 35% in the three days after the announcement, and again nearly 49% when the podcast debuted. Obama’s podcast was heavily marketed by Spotify, and current political strife in USA may have made listeners more eager to hear from the previous president and first lady. But still, it’s undeniable that there was interest generated by Obama’s podcast announcement and launch that wasn’t there for previous Spotify deals.
Spotify’s App Store ratings, however, show that the intended outcome for these deals may be retention rather than generating new users. Throughout 2020, Spotify’s App Store ratings have increased by a remarkable 2.2 million reviews, though at an incredibly consistent rate. There were no spikes in reviews around the announcement or release of any of the aforementioned exclusivities in the way one might expect when bringing a major celebrity into the fold.
But that’s not necessarily a problem for Spotify, whose goal may simply be to provide its already massive user base with even less reason to go anywhere else by bringing in new podcasts and old favorites alike.
One thing these deals do create, however, is investor interest. Immediately after the major exclusivity announcements, share price increased by $14.8 and $25.5 for Joe Rogan and Kim Kardashian West respectively, while share price dropped after the release of Obama’s podcast, which coincided with a somewhat lackluster earnings report for Spotify.
In the end, Spotify is likely to continue adding exclusive creators to its growing podcast network. But going forward, the rollout of these podcasts will look like it did for Michelle Obama: heavier marketing and careful selection.