Podcasts have grown in popularity over the last few years, creating massive follower audiences that listen to episode releases religiously and inspire other content creators to develop their own podcasts.
Spotify has become a podcasting empire, striking huge exclusivity deals with some of the industry's top talent, including Joe Rogan. "The Joe Rogan Experience" launched in 2020 and is now one of the most popular podcasts worldwide, with around 500 million Spotify streams.
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In July 2021, Spotify sealed an exclusive three-year deal with Alex Cooper and her "Call Her Daddy," paying over $60 million for one of the platform's most popular podcasts at the time.
However, at the beginning of last year, Spotify stopped renewing exclusivity deals with its top-performing podcasts after their terms ended, which opened the door for its rivals to take over.
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Spotify had previously invested in exclusivity deals with podcasters as its main strategy to grow its paid subscriber count and increase monetization. This timely business move proved effective, as the company's subscriber growth and revenues have only skyrocketed since.
Rival media companies adopt Spotify's business model to promote growth
Rival audio platforms and media companies decided to try to replicate Spotify's business model in the hope of enjoying the same positive growth results as the successful company. Rivals began closing costly megadeals with popular podcasters.
The broadcasting company SiriusXM (SIRI) acquired the "Call Her Daddy" podcast and the Unwell network in August of last year after striking a multi-year deal estimated to be worth around $125 million. The agreement gave SiriusXM exclusive rights to sell advertisements on the show's audio and video versions, as well as all other extra content and related events.
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The show "Call Her Daddy" is an advice and celebrity interview podcast hosted by its Executive Producer, Alex Copper. Formerly owned by Barstool Sports, the podcast is now part of the Unwell network, Copper's business venture in collaboration with popular content creators.
Alex Cooper announces the removal of the video version of the "Call Her Daddy" podcast from Spotify
On Monday, Alex Cooper announced via an Instagram story that the video episodes from her "Call Her Daddy" podcast are being moved from Spotify — where they had originally streamed — to YouTube exclusively.
The audio podcast will still be available for listeners on Spotify's platform, but its video version will only be available on YouTube. It's free to watch with ads.
Moving the video podcast to YouTube will help the show reach a broader audience since YouTube is the most popular video-sharing platform worldwide. It will also allow SiriusXM to increase the podcast's monetization through ads since YouTube allows for more ads to be inserted per video than Spotify, which tends to limit them.
Spotify's reason for ending its successful exclusivity deals strategy
Although Spotify's (SPOT) new strategy to end its exclusivity deals may seem odd since it has allowed its competitors to acquire successful podcasts that were once only exclusive to Spotify's platform, there is a reason for Spotify's madness.
On Sunday, Universal Music Group and Spotify announced they have reached a multi-year direct licensing agreement for "Recorded music and music publishing focused on growth, innovation, and the advancement of artists’ and songwriters’ success."
As estimated in the agreement, both companies will work closely to create new offers and subscription tiers and develop innovative music and non-music content with richer audio and visuals.
"...constant innovation is key to making paid music subscriptions even more attractive to a broader audience of fans worldwide," said Spotify CEO Daniel Ek.
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With this new deal, Spotify has shifted its growth strategies to focus on enhancing its user experience and providing better content to increase monetization and paid subscriber count.
Ending its exclusivity deals will also give Spotify room to invest in this new strategy and allow top-performing podcasts to distribute their content to other platforms to expand their audience reach while remaining available on Spotify's platform.
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