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UPDATE 9/3: Spotify has updated the eligibility for its Ambassador Ads program to ban white noise podcasters effective Oct. 1, Bloomberg reports.
As Spotify describes it, hosts in the program "read ads spreading the word about Spotify for Podcasters to listeners. These ads play across Spotify and other listening platforms where your podcast is distributed." Podcasters earn money based on impressions, and given that some people put on white noise podcasts for hours at a time, Bloomberg reports that they can make up to $18,000 a month for a show that's basically the same sound played over and over again.
Spotify is making a few changes that affect traditional podcasts, too. Going forward, Spotify plans to swap the impressions business model for a revenue-split approach, Bloomberg says. It also recently increased the threshold for participating in the Ambassador Ads program from 100 to at least 1,000 unique listeners on Spotify in the last 60 days.
Original Story 8/19:
Spotify reportedly considered removing white noise podcasts from its platform in a bid to reduce the amount of money it had to pay out to creators.
According to internal documents obtained by Bloomberg, as of January white noise and ambient podcasters accounted for roughly 3 million hours of listening on Spotify every day.
That may not seem like a big deal until you realize that those same podcasters, who are broadcasting shows that are essentially the same sound on repeat, could earn upwards of $18,000 a month from the ads Spotify places within the programming.
Adding to the issue is that Spotify inadvertently promoted this content through its attempts to push listeners to “talk” content over music. So it was actively driving listeners to these podcasts.
According to the internal documents, once Spotify discovered the issue, the platform considered removing the shows from the talk feed, prohibiting future uploads of the programs, and pushing listeners toward content that is more profitable for Spotify. Had they done so, Spotify could have reportedly increased its annual gross profits by $38 million.
While the proposal never came to fruition, Bloomberg notes that white noise podcasts have “vanished” from some users' accounts, and one podcaster said that several of their episodes went missing for weeks at a time, cutting into potential downloads.
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Spotify did make a money-making move recently, though: It raised prices.
In July, Spotify raised the price of its Premium accounts across the board, bringing the price of its standalone premium account to $10.99 a month, up from $9.99. At the time, the company said the increase was "so that we can keep innovating [and] will help us continue to deliver value to fans and artists on our platform."
The price increase brought the company’s streaming plan more in line with its competitors. Apple Music, Amazon Music Unlimited, and YouTube Music had already raised the prices of their base plans to $10.99 before Spotify’s price increase. (Amazon Music Unlimited also just increased its prices for Prime members from $8.99 to $9.99 per month.)
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