White Noise Podcasts Costing Spotify $38 Million Per Annum
This phenomenon costs Spotify a lot of money: it’s about so-called white noise podcasts, i.e. podcasts that only stream white noise instead of conversations. This is for relaxation, but causes immense costs.
White noise podcasts are quite popular
This is according to a report by Bloomberg. White noise podcasts have been a trend for a long time, because many Spotify users use the background noise to relax, to fall asleep better, or to improve concentration when working or reading.
There are many different sounds that are used, including the sound of waves or rain. Accordingly, there are many providers who have jumped on the white noise bandwagon. What actually sounds like an interesting development is a problem for Spotify. Because Spotify is forced to spend a lot of money on “contentless” podcasts, which shot up like mushrooms.
Bloomberg’s report shows that the company could increase its annual gross profit by a whopping $38 million by eliminating white noise podcasts.
Advertising costs are high
One of the reasons for their popularity is that Spotify initially unwittingly endorsed them for an extended period thanks to an “algorithmic preference for conversational content (as opposed to music)” according to Bloomberg. The creators of these podcasts make money from advertising, up to $18,000 a month.
This emerges from internal Spotify documents submitted to Bloomberg. It also states that white noise podcasts accounted for three million daily “consumption hours” on Spotify in January 2023 alone. After this finding, Spotify allegedly considered banning uploads for such podcasts in order to save costs.
However, the plan was never implemented: “The proposal in question did not materialize – we continue to have white noise podcasts on our platform,” a Spotify spokesman told Bloomberg.
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