Spotify Focusing on Exclusives and Improved Discovery to Challenge Apple as Go-To Destination for Podcasts

In July 2017, reports surfaced that Spotify had set its sights on Apple Podcasts and was planning a strong push into the space with a vastly reimagined podcasts segment that would become the default podcast listening app for many users. Today, The Verge has detailed Spotify's ongoing plans to make the service a premium podcast destination.

To start, Spotify intends to fix podcast discovery and prioritize the user experience by tweaking the algorithm that it uses for its streaming music Discover Weekly playlist. According to Spotify head of studio and video Courntey Holt, the team that built the discovery engine for music "is now working on podcasts."

Spotify also plans to create new and exclusive podcasts for the service, so that users have to subscribe to watch all of the latest and most popular shows. Outside of exclusives, Spotify is also planning timed exclusives that will go to other platforms after a set window and other release schedules with "a lot of experimentation," according to Gimlet Media co-founder Alex Blumberg.

Gimlet Media is a content creation company that Spotify acquired for $300 million last month, and is the home to notable big-name podcasts like Homecoming and Reply All. At the same time, Spotify also purchased Anchor, a company that offers a podcasting solution on the opposite end of the spectrum: letting users record and create their own shows that can be easily shared online.

According to Spotify CFO Barry McCarthy, "We're going to place a bet on both ends of the spectrum," because at this time the company isn't sure if user-generated shows or high-end original podcasts will be more popular. For both aspects, McCarthy said that he plans to use his time as Netflix's CFO to help bolster Spotify podcasts.

That means building “super good, predictive algorithms, like we developed at Netflix” so Spotify knows what people like, he said, then using those algorithms to figure out what kind of shows to make next. McCarthy calls this scenario “my nirvana.”

McCarthy said that Spotify won’t be an “arbiter of taste,” like HBO, but instead, it will make its name optimizing content creation and greenlighting shows that are sure to succeed. “Over time, we have lots of exclusive content because we get super successful at predicting how much to spend and what to invest in because we’re able to extract insights and data we’ve accumulated about our users’ taste.”

At this point, it's unclear how Spotify plans to monetize each podcast, and how this will factor into listener privacy. Back in 2016, monetization and user data privacy was one of the big complaints lobbed at Apple during a meeting between Apple executives and podcast creators.

The podcasters voiced frustration at their lack of ability to make money through subscription downloads, mainly due to insufficient access to data about their listeners. Although being more lenient about data privacy has the chance to improve the service, Apple has yet to make such a move in sacrificing user privacy for performance improvements that might benefit both podcast creators and listeners, similar to the methodology behind Siri and all other Apple services.

iTunes Podcasts was rebranded to Apple Podcasts nearly two years ago, the same year that Apple announced an overhauled Podcasts app with a richer user experience and listener analytics for creators. Toward the end of 2017, Apple acquired the podcast search startup Pop Up Archive to help improve searching and discovery in Apple Podcasts.

As of June 2018 Apple Podcasts hosts more than 18.5 million episodes of podcasts across 555,000 different shows.

Visit The Verge to read the full report on Spotify's future with podcasts: Spotify's Grand Plan for Podcasts is Taking Shape.