Spotify, one of the giants of audio streaming, faces a peculiar dilemma in its search for profitability: 'white noise' podcasts. Offering ambient sounds such as the lapping of waves or the whirring of a fan, this type of content has experienced surprising popularity on the platform, generating around 3 million hours of daily consumption.
However, this type of content generates a lot of profit - and very little effort - for its creators. while for the Swedish company it is not as lucrative as the songs. Some of these podcasts bring in revenue of up to $18,000 a month from advertising for their producers, according to Bloomberg calculations. Spotify is not clear that these podcasts add value -and business- to its platform, so it has decided to put a stop to them, according to the same publication.
As of October 1, 'white noise podcasters' will not be able to participate in Ambassador Ads, the program offered by the platform to advertise and monetize podcast content. Based on this information, this type of content will no longer be eligible to participate in content promotions. The determination was notified to the creators of said podcasts last Friday via email.
The reason why Spotify has made this decision is because despite the impressive number of hours of playback, 'white noise' does not represent as lucrative a source of income as other types of programming. In fact, the company even considered eliminating them, a move that would have increased its annual gross profit by $38 million, according to company calculations.
However, while white noise creators will no longer be able to access through this program, they can still earn money on the platform through paid subscribers, listener support, and automated ads.
The possibility of removing 'white noise' podcasts has not gone unnoticed by the Spotify user community. Some have begun to express their bewilderment on social networks when they noticed that their favorite podcasts had disappeared.
A creator of this type of content expressed that this disappearance of episodes meant a loss of 50,000 downloads per day on average in the three weeks that the first case lasted, and an additional 20,000 downloads per day the second time it happened, when the episode was missing for ten days.
Spotify, however, has clarified that the proposal to remove this type of content has not yet materialized and that the podcasts are still available. "The proposal in question did not come to fruition: we continue to have white noise podcasts on our platform," a Spotify spokesperson told Bloomberg via email.
Spotify, which has had mixed financial performance in recent years, is looking for ways to boost its profits. Despite having 220 million paying subscribers (27% more than last 2022) the company faces challenges to maintain its revenue, which is reflected in 6% less revenue per subscriber. This has led to several waves of layoffs, including the removal of 200 positions from its podcasting division in June.
The case of 'white noise' podcasts illustrates the delicate balance that streaming platforms like Spotify must find between content diversity and profitability. The podcast revolution has transformed the entertainment industry, but not all genres are equally profitable.
The Swedish platform is at the crossroads of satisfying its diverse creators and audiences while struggling to maintain a strong business in a world of fierce competition in audio streaming.
