Spotify: Engagement Is High Amid $100 Million Podcast Investment

The world may be an uncertain place, but people still want to listen to music.

So says Spotify CEO/Founder Daniel Ek, who said Tuesday (April 29) that his platform’s streaming music, audiobooks and podcast offerings continue to draw users in the face of global economic upheaval.

“Engagement remains high, retention is strong, and thanks to our freemium model, people have the flexibility to stay with us even when things feel more uncertain,” Ek told analysts during the company’s first quarter earnings call.

“So, yes, the short term may bring some noise, but we remain confident in the long term story, and the direction we’re heading in feels clearer than ever.”

Ek also took time to discuss the company’s Partner Program, a monetization system for video podcasters, which debuted in January and has since expanded it to nine new markets.

“And we’re seeing strong traction with users spending 44% more time with video content overall,” he said. “And as we work to scale quickly, the program has enabled us to pay out over a $100 million to podcast creators in Q1 alone.”

According to the company’s earnings report, Spotify saw its subscriber base increase by 12% year over year in the quarter, reaching 268 million.

The platform’s monthly active user numbers hit 678 million, a 10% uptick, while revenues rose 15%, to €4.2 billion ($4.7 billion).

As PYMNTS wrote earlier this year, subscription models such as Spotify’s allow for personalized offerings while maximizing potential revenue. In fact, research by PYMNTS Intelligence has found that 46% of consumers are “deal chasers” and will swap services to get a better deal, while other consumers can be enticed away from being loyal customers with a better price.

During the earnings call question-and-answer session, management was asked if Spotify would ever consider a lower-cost subscription program.

“I wish it was that easy that we could sort of look at other industries and how they’ve introduced lower price subscription plans and including ads in there, but it’s more complicated than that. Industries are sort of different,” said Alex Norström, the company’s chief business officer.

Rolling out something at a lower price, he argued, wouldn’t “drive much incrementality” to Spotify’s overall model.

“But never say never. There may be a time when this makes sense,” Norström said.