Spotify to Cut Back Promotional Spending on White Noise Podcasts

2023-09-02 00:54

Spotify Technology SA is cracking down on white-noise podcasters, reducing the advertising support for programmers that provide little

Spotify Technology SA is cracking down on white-noise podcasters, reducing the advertising support for programmers that provide little more than soothing sounds like rain or chirping birds.

In an email to creators Friday, the company highlighted changes to its Ambassador Ads program — promotional spots for Spotify that podcasters read. The company pays hosts to read ads to encourage more creators to make shows and join the platform.

As part of the change taking effect Oct. 1, white noise podcasters will no longer be eligible for such support, according to a person with knowledge of the matter. The company is also raising the audience threshold that conventional podcasters must meet to qualify for those ads to 1,000 unique Spotify listeners over the past 60 days from 100.

Spotify has been paying and providing ad support to podcasters who provide white-noise programming. They benefit from support intended for more conventional podcast creators.

White-noise podcasters can still make money through paid subscribers, listener support and automated ads that are placed in shows, but Spotify won’t spend any of its budget to support the programs through ambassador ads.

The marketing money wasn’t well spent given that people often listen to these shows in the background rather than during an engaged listening session, said the person, who asked not to be identified discussing the reasoning behind the policy change.

Bloomberg News reported in June 2022 that white-noise podcasters could earn as much as $18,000 a month, primarily through ads that Spotify placed. By January of this year, these shows accounted for 3 million daily consumption hours on the platform and reduced Spotify’s annual gross profit by $38 million.

Spotify on Friday also clarified an earlier announcement. Last week, the company said it intends to invite more podcasters to participate in its automated ads program, which involves the company inserting third-party ads into shows automatically, much like ads seen on YouTube.

The company said Friday it will split the revenue on those placements in half with podcasters versus the flat rate based on ad impressions that it has historically used.