Spotify is raking in ad dollars from its podcast offering, as its heavy investment in the medium pays off.
The streaming audio giant said it grew podcast ad revenue 627% year over year in Q2, driven by triple-digit growth at Spotify Studios, which includes The Ringer, Parcast and Gimlet. Spotify doesn’t break out podcast revenue figures, but overall, ad supported revenue grew 110% year over year to €275 million ($324 million).
Megaphone, the podcast ad tech platform Spotify acquired for $235 million in November, is contributing to podcast ad spend growth, as well as exclusive deals with Joe Rogan and the Obamas, the company said.
Spotify now has 2.9 million podcasts on its platform, including a new estimated $60 million licensing deal with the Call Her Daddy podcast as well as with Dax Sherphard’s Armchair Expert.
Podcast listening hours increased 30% year on year per user in Q2. Total time spent listening to podcasts on the platform increased 95% across Spotify’s user base.
Spotify has spent millions of dollars building up its podcast arsenal, starting with its $340 million acquisition of Gimlet and Anchor in 2019. The audio streaming platform then inked a $100 million, three-year exclusive licensing deal with Joe Rogan, bought Bill Simmons’ The Ringer for close to $200 million, acquired Megaphone and continued to strike high-profile exclusive deals with celebrities including Bruce Springsteen and Prince Harry and Meghan Markle.
Overall, Spotify’s revenue in Q2 grew 23% year over year to €2.3 billion ($2.7 billion). Use of Spotify ad studio, its self-service ad buying platform, soared 165% year over year as more ad buyers purchase streaming audio ads programmatically.
Spotify missed expectations on monthly active users, growing 22% to 365 million in the quarter, adding just 9 million users, which it chalked up to COVID-19 disruptions.