Spotify Sees Podcast Losses Peaking in 2022, Says It Monetizes Only 14% of Listening Time Currently

variety.com:

Todd Spangler NY Digital EditorSpotify disclosed some key financial metrics of its podcast business for the first time — and while the $1 billion-plus the streamer has invested into podcasting so far has been a drag on overall profits, the company expects podcasts to eventually have a better margin profile than its core music biz.The company outlined its long-term strategy and financial prospects at its 2022 Investor Day event Tuesday.In 2021, Spotify’s podcast business generated nearly €200 million in revenue, according to CFO Paul Vogel — up 300% year over year.

About 30% of Spotify’s user base, or more than 125 million monthly users, listened to podcasts in the first quarter of 2022, representing 7% of total listening hours on the platform in the period.

However, the podcast business had a negative gross margin of -57%, according to Vogel — and the losses will be even higher this year.

That said, Spotify monetized only 14% of podcast listening on the platform in Q1, Vogel said, suggesting that the company has room to expand the podcast advertising business.