Spotify limits ad payouts, takes drastic measures to boost profits
By Kingsley Odii
In a shocking move that has sent ripples through the podcasting community, music streaming behemoth Spotify reportedly decided to limit ad payouts for white noise podcasters.
White noise podcasts, known for their soothing sounds like rain or static, have been a popular choice among listeners seeking relaxation and calm. However, Spotify’s decision to exclude them from their Ambassador Ads programme has left these creators in a state of uncertainty.
According to an internal email obtained by Bloomberg, Spotify has made significant changes to its Ambassador Ads program, through which creators are paid to promote Spotify content. Starting from October 1st, white noise podcasters will no longer be eligible to participate. The streaming giant cited the need to boost its annual profits as the reason behind this controversial decision.
Bloomberg further reported that Spotify will no longer allocate its marketing budget to support white podcasters through the Ambassador Ads program. However, these creators can still generate income from paid subscribers, listener support, and automated ads, which insert third-party advertisements into podcasts – similar to the approach taken by YouTube.
A source revealed to Bloomberg that the money invested in white noise podcasts ‘wasn’t well spent’ as these playlists often serve as background noise rather than engaging active listeners. While Spotify has yet to officially confirm these changes, it remains unclear how this decision will impact the white noise podcasting community.
The Ambassador Ads program has been significant for podcast creators, with some earning up to $8,000 per month through the program, according to a Bloomberg report. In leaked documents from January, it was discovered that Spotify unintentionally boosted white noise and ambient podcasts as part of its strategy to promote talk-based content over music. These ambient podcasts accounted for around 3 million hours of daily listening on the platform.
In a bid to further optimize its podcasting efforts, Spotify has also increased the audience threshold required for conventional podcasters to join the Ambassador Ads program, from 10 to 1,000 unique Spotify listeners in the past 60 days. The company aims to invite more hosts to its Automated Ads program, offering participants a 50 percent split of the revenue.
The motives behind Spotify’s decision to limit ad payouts for white noise podcasters can be traced back to its pursuit of maintaining profitability. Despite its recent earning report boasting 220 million paying subscribers, a 27 percent increase from the previous year, the company is grappling with a decline in revenue per subscriber, which stands at around 6 percent less. Significant layoffs were announced earlier this year, with 200 roles being cut from Spotify’s podcasting division in June.
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