Is Spotify’s new monetisation model unlocking the power of video in podcasting?

In October, MIDiA positioned Spotify’s video push as both a strategic move against YouTube and also as an evolution in the platform from music-first to audio-first to format agnostic. As we noted, the company’s mission statement is “to unlock the potential of human creativity — by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it”. While “creative artists” may have once referred only to music artists, it now invites wider interpretation. Audio — or the mention of any format — is absent from this mission, meaning the company is not beholden to traditional podcasters or musicians. Like YouTube, Spotify’s vision involves platforming creators irrespective of format.

At Spotify’s Now Playing event last week, the company confirmed our analysis, officially renaming its Spotify for Podcasters hub to Spotify for Creators and arguing that “the definition of a podcast is now more fluid”. Alongside this rebranding, Spotify revamped their video monetisation model with the Spotify Partner Program, which closely resembles the YouTube Partner Program. In effect, video creators who have published at least 12 episodes and, in the last 30 days, hit at least 10,000 consumption hours and had at least 2,000 people stream their content can monetise their videos. But this revenue only comes partly from advertising, because video podcasts will no longer have advertisements for Premium subscribers. That means additional revenue must come from somewhere else.

Spotify’s monetisation pivot for video is sure to ruffle some feathers in the music and audiobook industries given the fact that video podcasts will now be competing with these formats for what appears to be the same subscriber dollars. However, advertising will still be the most important monetisation source for audio podcasts on the platform, given the fact that 44% of Spotify podcast app users still prefer listening to podcasts without watching video (compared to 38% who watch full video podcasts on the platform and 17% who watch clips on short-form video platforms), according to MIDiA’s Q2 2024 Consumer Survey. 

A plurality of Spotify podcast app users still prefer to listen to podcasts without video, indicating that while video is increasingly important for podcasting, video podcasts will not replace audio podcasts. If anything, the result should be additive for the podcast industry, providing podcasters an additional revenue stream and podcasts an additional marketing driver, which should ultimately be a boon to advertising revenue. Alongside long-form video, Spotify is rolling out short-form video capability, allowing video creators to upload up to 90 seconds per episode. Those clips are then “recommended across Spotify app surfaces like the Home feed, Podcasts feed, Browse, the Now Playing view, and more” in an effort to help users “find their next favourite show”. With 45% of podcast listeners now discovering podcasts via YouTube or TikTok clips — more than any other discovery channel by far — short-form video is an essential feature for improving on-platform discovery.

Offering video as both another way to consume audio and also a discovery mechanism is exactly what platforms should be doing when incorporating video into their podcast offerings, but the effectiveness of this strategy will depend on how these clips are served and displayed in Spotify’s UI. So far, Spotify Clips has not had the same impact on music discovery that playlists have had. In order to prevent this from happening with podcast clips, Spotify will have to ensure that users are using the platform for video and that clips are being served according to user tastes. 

To understand the complexities of video in podcasting, including how platforms should continue thinking about video as a means to buoy podcasts and not replace them, check out our new report, 'Visionary Audio: Unlocking the power of video in podcasting'.