Maya is VP of Podcast Product at Spotify — this interview has been lightly edited for style and readability
Maya Prohovnik: We’re seeing a lot of excitement from Spotify users about video, so I’ll give you a couple stats that we’re very excited about. One is that since last year, we’re seeing users have increased by 44% how much they’re looking at the Spotify app, which I think is really interesting: they’re using it in the foreground. We’ve also seen that the top 20 video podcasts who have signed up for the Spotify Partner Program are seeing an average of 24% growth on Spotify in terms of their audience. So we’re really happy, both in terms of the offering we’ve been able to bring to users, but also in the outcome that we’re seeing for creators. It just feels very positive, and we’re still super early.
Video is not new on Spotify - this is not something we suddenly added. We’ve had video catalog on Spotify since 2019. But there’s a couple of things that have shifted. One is that the demand from podcast audiences for video is, I would say, undeniable at this point. We’ve all seen that the definition of podcast has expanded. We see that now the vast majority of users expect and prefer podcasts to have a video option, and more and more of them are actually consuming that content in the foreground. The other thing that’s new is this Spotify Partner Program.
We’ve had video on the platform for a long time, but we haven’t had a great way to monetize video and to optimize for video, and so this is the piece that that we’re really excited about and that I want to make sure people understand. Spotify is primarily a premium subscription business, and we saw this opportunity to both improve the experience for our subscribers - like now, when you watch um a video podcast as a Spotify subscriber, you don’t have to be interrupted by ads, which is really nice. But the other exciting piece of this is that we’re able to give creators a direct cut of that premium engagement as revenue. What we’re seeing is that for almost all shows who have switched from audio to video, they’re making more total revenue. That’s why we’re doing video.
James Cridland: Is there any detail in terms of how much money goes in? So if you’re a Spotify premium subscriber, there’s some money that goes into a pot that then gets shared out? Is that basically how it works?
MP: It’s revenue based on the amount of engagement you get. We surface this for creators in Spotify for Creators. So you can just log in and see exactly what’s happening with your show.
The question we keep getting from people is like how much money will I make from premium? What is the exact RPM in premium? And I think that really misses the bigger picture, because the the landscape for podcast monetization, as you know, is very complicated and the reality is that you have to look at how all of this stuff works together. And that is the thing that I’m most excited to talk to you about today and try to dispel some of these misunderstandings or pointd of concern that people have about the program.
JC: One of the questions that I do have - and it’s possibly a rude question - but if you’ve got Spotify Premium, you get videos that are uninterrupted by ads. Why would advertisers only want to reach people who can’t afford to pay for Spotify Premium?
MP: I think that’s a really interesting way to frame the question. I think what advertisers care about at the end of the day is reaching as many people as possible. The way that SPP works on your RSS feed is that it works just like it does today. Right, we still are distributing that content over RSS. It is monetized with DAI, dynamic ad insertion, as it is today. Nothing changes in Spotify Free. You’re still able to run dynamic ads, but they’re delivered through SAI, streaming ad insertion, which is our on-platform equivalent of DAI. But so you’re still able to reach Spotify free audiences and use dynamic ads there.
With Spotify Premium, what you can do, even if you have video content, is you can bake in sponsorships: so if you have an advertising campaign that spans dynamic ads and baked in sponsorships, you are still reaching the same audiences on Spotify. And we have the ability to measure audiences who are experiencing those baked-in sponsorships.
We often get this question of like people are so nervous about “losing access” to Spotify premium users. That’s really not the case. This is why we’re so excited about baked in sponsorships, and we’ve seen that this is a really exciting piece of the puzzle for publishers who are open to experimenting with that. It can be a way for this revenue to be additive for you, as opposed to just thinking about what you’re “losing” when you switch to video.
JC: So baked in is clearly one thing, but you do lose dynamic ad insertion. You lose VAST ads. You can’t use third-party analytics with prefix URLs either, so far as I understand it from one of the articles that I’ve read recently.
MP: We certainly do understand and agree with the importance of ad measurement, third-party attribution and being able to give a consistent and a full picture to advertisers. That’s really important to us and we are working on ways to fill some of the gaps that you mentioned. I’m excited to share more information when we can, but I just want to say that we acknowledge that gap, we see it, we agree with the problem and so we’re working on that.
So when we talk about “losing” something, I really think we can change this conversation to talk about how video is an optional and additive layer to your existing audio podcast strategy. So if you think about what happens when are already making video content and you want to experiment with monetizing it on Spotify, first think about most shows. The vast majority do not have a hundred percent sell through rates. Maybe a couple do, but the vast majority of them are not selling through a hundred percent of their inventory. So one thing that immediately happens when you do this and you stop trying to fill premium inventory is you’re able to more effectively fill the inventory that you have available on Spotify Free, and across your RSS feed. So that’s one calculation that I think sometimes people miss the reality of.
What happens is that for almost every show, premium video revenue matches or exceeds the payouts from the dynamic ads that you were running previously in Spotify Premium. So let’s imagine a world where nothing else changes, except that you are now delivering video instead of audio to Spotify. We are confident saying that the vast majority of shows - almost all of them that we’ve seen - make roughly the same amount of money from that transition. So premium video revenue pays out as effectively as your dynamic ads do. There’s a lot of variables and factors here depending on the show, so there’s a little over, a little under, but think of that as roughly equivalent to what you’re making today.
But two additional things happen as a result of switching to video. One, as I mentioned, is you can start selling those baked-in premium sponsorships for Spotify Premium, and a lot of publishers are already starting to do this today with video that they have on other platforms or with Spotify. These can be sold at higher premium rates and they still enable you to reach that same audience on Spotify Premium. So overall - and again I think we have some work to do on measurement and attribution - but overall you’re still reaching the same audiences. You have these sponsorships at higher premiums, so you’re actually getting some additive revenue there.
And then the other thing that happens as a result, is that audiences grow directly and meaningfully as a result of switching from audio to video. We’re seeing that video episodes, all else being equal, convert and retain users better than audio only. It’s also because we have these new surfaces where Spotify is able to get you right in front of those users. We have all of these great success stories now.
This is why it’s so hard for me to shave this debate of “what do I lose when I switch to video”. I really think that’s the wrong way to look at the big picture.
We are not forcing anyone into this. This is an optional thing that I would recommend if you are already making video content, or if you’re thinking about expanding to video. If you are in that bucket, I think you’re going to be thrilled by the outcome of SPP. If you’re an audio only show, or a primarily audio show, there are operational challenges, there are some gaps with reporting back to advertisers that we need to fill.
I think the the reality is this is a new program for us. We’re really thrilled with how it’s going. We think there’s a ton of room for improvement in the future. But the true answer is that almost everyone who is using this program today are really happy with what it means for their revenue. As an industry, I think we have to get comfortable with talking about this in less black and white terms - I’m happy to talk to you about why video doesn’t make sense over RSS, it’s not the right solution for video, and I want all of us as an industry to focus less on how we can squeeze video into the standards that we’re currently used to and more how we can lean into video and make sure that people who are making video can reach as many audiences as possible and can make as much money as possible, and that’s really what we’re focused on.
JC: If people do have questions, what’s the best way of getting those answered?
MP: I know a lot of people do have questions. We’re working with a ton of people throughout the industry: our partners, many publishers, many hosting platforms. We are interested in talking to everyone about how we can make this work with the industry, and what gaps people are seeing that they’d like us to address. I would love for people to reach out.
If you’re a show on Spotify and you have a partner manager, obviously reach out to them. They are ready. They have all the same information I have. They’re really eager to talk to people about this. If you don’t have a partner manager, you can reach out to us through support channels on either Spotify for Creators or Megaphone. But, just to clarify, you can use Spotify for Creators even if you are hosted somewhere else, so it’s still a great portal for you into many of the features that Spotify has to offer. And then, as always, people are also welcome to reach out to me. I’m mayafish on most social media platforms and I love talking about this stuff, so always happy to have those conversations.
JC: Very cool. Thank you so much for talking about it with us.
MP: Thank you so much just for the opportunity. It’s always so great to get to talk to other people in the industry who are thinking about these challenges, and so we welcome the questions, we welcome the discussion and we really appreciate your kind of attention to detail on this and thinking about what this can look like for the future of the industry.