Spotify Surpasses Apple Podcasts in US Listener Numbers

Spotify Surpasses Apple Podcasts in U.S. Listenership

Recent analysis from eMarketer indicated Spotify was projected to exceed Apple Podcasts in U.S. listener numbers this year. Now, Spotify has announced it may have achieved this milestone. During its Q3 2021 earnings conference call, the company stated that, based on data from Edison Research and its own internal metrics, it “recently became” the leading podcast platform for U.S. listeners.

Growth in User Base and Subscribers

Considering the U.S. represents the largest podcast market globally, this achievement is noteworthy and reflects Spotify’s substantial investment in podcasts over the past several years. The company reported a 19% year-over-year increase in monthly active users, reaching 381 million during the quarter, compared to 365 million the previous year.

Furthermore, the number of premium subscribers also rose by 19%, totaling 172 million, an increase from 165 million year-over-year.

eMarketer’s Forecasts

According to recent data from eMarketer, Spotify and Apple Podcasts were closely competitive in terms of U.S. podcast listeners. Their analysts predicted last month that Spotify would reach 28.2 million monthly U.S. podcast listeners by the end of the year, slightly surpassing Apple Podcast’s 28.0 million.

This prediction mirrored earlier forecasts made by the firm in 2021. They also projected Spotify’s U.S. podcast listener base would continue to expand, reaching 43.6 million by 2025.

Edison Research Confirms Usage-Based Ranking

Edison Research confirmed the podcast milestone is determined by usage patterns, rather than simply download numbers. Their second-quarter Podcast Consumer Tracker, a subscription service covering the podcast industry, asked respondents which platform they use most for podcast listening.

Spotify emerged as the top choice, favored by 24% of weekly podcast consumers, surpassing Apple Podcasts for iOS (21%) and YouTube (18%). Edison Research’s sample size exceeds 8,000 weekly podcast consumers. (It is important to note that Spotify is a client of Edison Research.)

Podcast Growth Attributed to Content and Product Improvements

Spotify attributes its growth in podcast listenership to both its expanding content library and ongoing product enhancements. CEO Daniel Ek highlighted the platform’s evolution since entering the podcasting space three years ago.

“We began our podcasting journey with approximately 185,000 podcasts, and were relatively insignificant compared to established industry leaders. Today, we host 3.2 million podcasts, representing a growth rate exceeding 1,500%,” Ek stated. The previous quarter saw 2.9 million podcasts available on the platform.

The Impact of Investment and Innovation

“Our success can be attributed to our content investments, but also demonstrates the impact of our platform improvements and product innovations on our overall business,” Ek explained. “The speed of development is crucial – from the introduction of interactivity features like polls and Q&A, to enhanced listening capabilities and new original programming worldwide.”

Ek emphasized that Spotify’s commitment to innovation fosters an improved user experience, attracting more creators to the platform and, subsequently, more advertisers.

A Positive Feedback Loop

“This synergy between users, creators, and advertisers unlocks the power of our flywheel,” he added.

Apple’s App Revamp and Potential Impact

Spotify’s achievement in U.S. podcast listenership, which the company confirmed to TechCrunch had not been publicly disclosed until now, coincides with a recent overhaul of Apple’s Podcasts app. This revamp faced criticism from both creators and users, who reported bugs, errors, and a confusing user interface.

Apple released a fix for a critical bug related to automatic downloads this summer, but the damage to its reputation may require more time to repair.

Strong User Engagement and Advertising Revenue

Spotify reported that monthly active users remained strong during the quarter, increasing by 20% year-over-year on a per-user basis. Podcasts also reached an all-time high in terms of their share of overall consumption hours.

Podcasts are also contributing to Spotify’s financial performance. The company reported its largest-ever quarter for advertising revenue in Q3, partially driven by its growing podcast catalog, and anticipates surpassing €1 billion in advertising revenue for 2021. While the specific portion of ad revenue generated by podcasts wasn’t disclosed, podcast advertising growth is described as being “in the triple digits.”

New Features and Content

During the quarter, Spotify launched several updates to its podcasts platform, including paid podcast subscriptions in the U.S., new interactive tools for Anchor creators, expansion of its Music + Talk podcast format, and support for video podcasts. Additionally, 32 new Originals & Exclusives were released, including “Armchair Expert” with Dax Shepard and “Call Her Daddy” in July.

Spotify also established a multi-year content partnership with The Ringer and WWE for original and exclusive content. Internationally, 76 new Originals & Exclusives were released.

Overall Financial Performance

Spotify’s overall revenue for the quarter was $2.9 billion, a 27% increase year-over-year, with ad sales rising 75% to $374 million, aligning with the company’s guidance.

Resilience to iOS Privacy Changes

The company stated it had not been significantly affected by the iOS privacy changes that impacted other ad-supported businesses, such as Snap and Facebook, due to its “a ton of first-party data” derived from its logged-in user base.