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Spotify has not been shy about spending money when it has come to podcasting, laying out more than a half billion in investments including its biggest to date: this month’s $235 million deal to buy Megaphone. How much will it spend in 2021 or 2022? CFO Paul Vogel says that will depend on how successful it is with what it already owns. 

“If you see us continue to spend aggressively in podcasting, it's probably a good indication that we feel like there are benefits to the overall business, both from an advertising standpoint, but also from a user growth and retention standpoint,” said Vogel. He told an RBC Capital Markets investor conference Tuesday (Nov. 17) that the “successes and learnings” Spotify has from its current investments will help dictate how much it continues to spend on podcasting in the years to come.

One of those investments is a reported $100 million licensing deal with Joe Rogan that will make his podcast a Spotify exclusive beginning December 1. “We've been very pleased with how the performance of Joe Rogan has been already to date,” said Vogel. He told analysts the company feels “really optimistic” about what kind of numbers the Joe Rogan Experience could attract once it is no longer available on other apps.

Less certain is whether Spotify will ever launch an app dedicated just to podcasts. Vogel said even though they test and experiment with all sorts of ideas, he told the conference, “I'm not sure if that's going to be one of them or not.” Such a move would undercut one of the biggest advantages that having Spotify users listen to podcasts and not music – the reduction in how much the company pays in music royalties. “It's a lot more fixed price content, which is great for us,” said Vogel.

During the third quarter Spotify said 22% of its monthly users also listen to podcasts. Vogel said there are other advantages beyond just lowering royalty expenses. “We're seeing people who engage with podcasts and engage with more content,” he said. “We're still early enough in that kind of proving out all of the causality relative to correlation on some of those things. We're still working to prove out, but we feel really good about sort of the health of what podcasts is doing for the overall business and ecosystem at Spotify.”

One area the company does not expect to embrace is live streaming or radio-like webcasts. Vogel told analysts “the on-demand component of Spotify is really what set us apart.”