Spotify is mulling over the idea of restricting white noise podcasts from its platform in a bid to enhance profitability after realizing its algorithm inadvertently promotes them and takes audiences away from regular talk feeds.
That’s according to Bloomberg, which reported on Friday (August 18) that the streaming giant is eyeing a $38 million annual boost to its profit as a result.
Spotify had been pushing for its podcast strategy since acquiring podcast creation app Anchor in 2019. That deal reportedly drew more creators to the platform, resulting in 44% of all podcasts being hosted on Anchor by July 2022.
However, not all podcasters offer talk content. Some have found success through white noise podcasts.
Citing an internal document, Bloomberg said white noise podcasts have collectively amassed 3 million daily consumption hours on the streaming platform as of January 2023.
But these non-verbal podcasts are found to have been quietly absorbing resources while providing an experience free of traditional spoken content.
These podcasts endlessly loop soothing sounds such as gentle rain, ocean waves, or steady static. They have garnered an extensive listener base due to Spotify’s algorithmic emphasis on “talk” content, versus music content.
A previous Bloomberg analysis estimated that these podcasts could generate as much as $18,000 per month from the ads placed by Spotify.
After recognizing the significant traction achieved by white noise podcasts, Spotify considered a strategic shift involving excluding these podcasts from their talk content feed, as well as suspending future uploads, and redirecting users toward alternative forms of content.
However, a Spotify spokesperson reportedly told Reuters: “The proposal in question did not come to fruition — we continue to have white noise podcasts on our platform.”
A Reddit thread detailed an instance where specific white noise podcast episodes mysteriously vanished from users’ accounts.
The development comes as Spotify continues to crack down on so-called ‘fake artists’ behind certain tracks or albums that are attributed to artists who may not actually exist.
These tracks are often created with the intention of generating revenue through streaming.
One notable example is Fruits Music (previously Strange Fruits), a label-playlist hybrid with an extensive Spotify following. Fruits Music offers curated playlists for different moods and activities, including sleep and concentration.
However, these models have sparked debates over their impact on real artists, who now receive a smaller portion of Spotify’s revenue pool as they compete for listening time against fake artists.
According to recent data from Luminate (the entertainment market monitor and insights provider that was once known as MRC Data and Nielsen Music), an average of 120,000 ISRCs (i.e. new music audio files) were uploaded to music streaming services per day in the first quarter of 2023, and most of them are just white noise.
Music Business Worldwide