Spotify is following the money to podcasts and sports shows

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The company wants to reduce its reliance on music as music rights holders collect the majority of Spotify’s revenue

Los Angeles — Spotify Technology is developing several daily sports shows, a big part of the music-streaming giant’s push into original podcasts, according to people familiar with the plans.

Sports is one of the most popular genres in traditional radio and podcasting, making it a priority as Spotify builds out its slate of original and exclusive shows. The company recently hired Amy Hudson to oversee sports and has talked with Barack and Michelle Obama’s production company, Higher Ground, about making shows, the Information reported.

Podcasts broaden what Spotify can offer to current and future customers, potentially dissuading them from dropping the service for radio or Apple’s podcast app. Apple accounts for the majority of podcast listening in the US, though Spotify’s share has grown. Radio still commands more than 240-million listeners a month in the US.

Podcasting won’t improve Spotify’s profit margins right away, but the company is hoping to generate advertising sales that it won’t have to share with record labels. US radio stations generated about $13.5bn in advertising sales last year, Magna Global estimates. Podcasts likely collected less than $700m, while Spotify generated €461m in ad sales through nine months of 2019.

 

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