Netflix has had 4.2 million downloads to date of the podcasts it has created and the recent hiring of N’Jeri Eaton, a veteran of Apple and NPR, to lead the company’s growing podcast business signals it aims to grow those numbers. But Netflix CEO Reed Hasting says the aim of podcasts remains to serve as a promotional tool for its video streaming service, not to make money on its own.
“They’re not a profit pool of any material size on their own, but they are helping,” said Hastings. “The reason we’re doing them is to help the subscription service grow and be more important in people’s lives. We’re a one product company with a bunch of supporting elements that help that product give incredible satisfaction for consumers and a monetizing engine for investors.”
During a conference call with Wall Street analysts Tuesday, Hastings said he sees podcasting in the same vein as the company’s online store and video gaming – a new feature that Netflix has just announced it is adding to the platform. When asking if they had the potential to be a meaningful profit pool in the future, Hastings responded, “none of them is – they’re not designed to be” referring to podcasts as one of the “supporting elements” Netflix has at its disposal.
The need for promotion has grown this year as the pace of new subscribers has slowed and its engagement numbers ticked lower. Netflix added 1.5 million subscribers worldwide during the second quarter, but that was fewer than the 10 million it added during the second quarter last year when the pandemic had people stuck at home in front of their televisions. Netflix is also facing more competition from rivals such as Disney+ and HBO Max.
Spending money on podcasts does not seem like much of a hurdle for Netflix. It reported $1.35 million in profit during second quarter.
Netflix has already created companion podcasts for the Martin Scorsese film “The Irishman” called Behind the Irishman and for several TV series such as The Crown: The Official Podcast. It also has other podcasts not tied to shows or movies such as Because I Watched, Call Sheet, and You Can’t Make This Up.
Bringing Eaton onboard as Head of Podcasts for the company is seen as a signal that it aims to have more content unrelated to TV shows. But more shows tied to series are likely. The company confirmed that it planned to release more podcasts as it competes against rivals Apple TV+ and Amazon Prime. “Podcasts are an excellent way for fans to connect with our stories and talent, and our marketing team plans to make more of them,” a Netflix rep told the Los Angeles Times in May.