Spotify isn’t only buying companies with the millions it has vowed to invest to build a podcast business. The company is building a 154,000-square-foot complex in Los Angeles that executives say will become the hub of its podcast business. The Hollywood Reporter says the downtown L.A. building includes 17 recording studios, a mixing suite, green rooms and a live event space. It also has a secure entrance that will allow high-profile hosts and guests to be whisked in and out without notice.
Having studios in Los Angeles isn’t unique of course, lots of radio, podcast and media companies operate there. Just last month SiriusXM Radio opened a new outpost in Hollywood. For Spotify, whose U.S. headquarters are in New York, the move signals something else: that it has greater plans to expand its own content creation.
That effort got a high-profile bump when the streaming audio company signed a reported $10 million deal with Higher Ground, the production company created by Barack and Michelle Obama, to create podcast content. Chief Content Officer Dawn Ostroff said what attracted the former first couple was Spotify’s global reach of 248 million users. No shows have been released so far, but the lineup will include both unscripted chat shows and fiction projects in a variety of genres, including sports and entertainment. No political programming is on the menu, however. Former MTV editorial director Dan Fierman has reportedly been hired to lead the development of shows for Higher Ground, which will touch on issues such as race, class and civil rights. Ostroff said she hopes to have “at least one, maybe two projects” from Higher Ground released in 2020.
The Obama deal helped open other doors for Spotify, which the Hollywood Reporter says has since signed podcast development deals with Jordan Peele’s Monkeypaw Studios, Paul Feig’s Powderkeg, and Mark Wahlberg’s Unrealistic Productions. Feig, who is working on a true crime satire podcast, said they’ll have a TV-like budget to produce the 11-episode series. “It allows for talented writers and name actors to do the voice work,” he said.
Spotify is also convincing some indie podcasters to become exclusives. This week The Last Podcast on the Left announced it would become a Spotify exclusive starting in January. The Hollywood Reporter says the streaming company is paying six- and seven-figure checks in some cases to secure such deals.
In the cover story, Spotify CEO Daniel Ek told the Hollywood Reporter that as it rolls up its own podcast team with those it acquired from Gimlet Media, Anchor FM and Parcast, the internal debate is about how users relate to content and show recommendations. He said that they’re also less focused on how many people stream a show. “We've moved away from raw consumption as a metric and instead are focused on more qualitative metrics,” said Ek.
Spotify’s interest in podcasting came after audio books sent the app’s usage soaring in Germany. It opened Ek’s eyes to the potential of non-music content. "It was an awful experience," recalled Ek, but added that if people were willing to sit through chapters being delivered in random order, he know that there was “something special” about the spoken word. It was made all the more appealing when an attempt to break into the video space failed to take off.
Spotify says it today has more than 500,000 podcasts on its service and, according to Comscore, the average age of its podcast listeners is 34. It still has only has a fifth as many podcast listeners as Apple, however.