Spotify considered cutting 'White Noise' podcasts that were earning creators significant money.
An internal document shows that white noise podcasts account for 3 million daily consumption hours on the platform
Podcast creators specializing in 'white noise' content were cashing in on Spotify, and it seemed the streaming giant wasn't thrilled about it.
These creators produce audio content that essentially features repetitive sounds.
According to Bloomberg, as of January, white noise and ambient podcasts were accumulating approximately 3 million hours of daily listening on Spotify.
What might appear insignificant takes a different turn when you realize that these podcasters, with their repetitive content, could earn over $18,000 per month from the advertisements Spotify inserts into their shows.
Compounding the problem was Spotify's inadvertent promotion of this content while attempting to steer listeners towards more conversational content rather than music.
Inadvertently, Spotify was driving listeners towards these very podcasts.
The internal documents reveal that Spotify contemplated several actions, including removing these shows from the talk feed, restricting future uploads of such programs, and guiding listeners towards content that would be more profitable for Spotify.
This move could have potentially increased Spotify's annual gross profit by $38 million.
Earlier, Bloomberg reported that 'white noise' podcasters were making substantial earnings, sometimes up to $18,000 per month.
Many content creators on the platform, not just those producing 'white noise,' use Spotify's free hosting software, Anchor, to publish their podcasts.
Spotify acquired Anchor in 2019, and apart from aiding creators in podcast creation and distribution, it also offers monetization options.
Although 'white noise' podcasts attracted a substantial audience, they might not have been as lucrative for Spotify compared to other content categories.
The company reportedly contemplated removing such podcasts entirely and preventing future uploads in this category.
The documents didn't specify what Spotify meant by "comparable programming," but it might refer to content designed to induce sleep, reduce anxiety, or provide relaxation—similar goals to those of 'white noise' content.
In other news, Acast, a podcast hosting and monetization service, announced a significant change regarding Spotify's podcast attribution, starting from September 1.
Advertisers will now be encouraged to use Podscribe for tracking campaigns, a service that Acast will provide across its network for free.
In July, Spotify increased the price of its Premium accounts, aligning its rates more closely with competitors like Apple Music, Amazon Music Unlimited, and YouTube Music.
This move aimed to support innovation and maintain value for both fans and artists on the platform.
Descript, the transcription and editing service, has bought SquadCast, software that lets people record their shows virtually. The deal terms were not disclosed.