Spotify is reportedly cracking down on white noise podcasts by limiting advertising support – months after an internal analysis found the broadcasts were costing the streaming giant $38 million in annual profit.
As of Oct. 1, white noise podcasters will no longer be eligible to earn money through Spotify’s “Ambassador Ads” program, Bloomberg reported, citing a source with knowledge of the matter. The program pays podcast hosts to read ads for Spotify during their shows.
The source said Spotify determined “the marketing money wasn’t well spent” because users generally keep white noise podcasts, which feature calm and relaxing sounds such as falling rain, crashing waves or static, on in the background rather than actively listening.
Additionally, the Ambassador Ads program was meant to provide support for traditional podcasts rather than white noise shows, which have little to no verbal content.
White noise podcasts have become surprisingly popular on Spotify, generating three million daily consumption hours on the platform as of January, according to an internal document obtained by Bloomberg last month.
The programs are so popular that Spotify considered eliminating them and redirecting users to music from stars like Drake or Ed Sheeran and other “comparable programming” that is more cost-effective for the company.
The company eventually decided not to follow through with the move, even after an internal probe determined it would boost gross profits by $38 million.
While they’ve lost some advertising support from Spotify, white noise podcasters are still allowed to operate on the platform and can earn money from subscribers, listener support and automated ads, the report said.
Spotify informed content creators of tweaks to the Ambassadors Ads system in a Friday email, according to the report. The company also raised entry requirements for the ad support, stating that podcasters need to reach 1,000 unique users over a 60-day period – up from the old barrier of just 100 listeners.
At the same time, Spotify signaled it would allow more podcast hosts to be eligible for its automated ads program and will enact a 50-50 revenue split.
A Spotify spokesperson confirmed the changes in a statement to The Post, noting that they were meant “to establish consistency with other podcast monetization programs across Spotify and bring us into alignment with the industry standard.”
“In conjunction, as part of our effort to scale the Automated Ads program, we will be updating the eligibility criteria for Spotify’s Ambassador Ads,” the spokesperson said. “We continue to offer a number of free monetization solutions, including podcast subscriptions and listener support, for shows of all sizes.”
Source: NYPOST