Spotify lines up $500 million for podcast investments in 2019
Spotify (SPOT) has signed former US President Barack Obama and his wife, Michelle, to supply it with podcasts for its global audience. The Obamas will produce exclusive podcasts for Spotify through their production company known as Higher Ground. Podcasts by the Obamas will cover a wide range of topics, with the former president saying that they’ll foster productive dialogue, make people think, and make people smile.
Podcasting is shaping up to be a lucrative business, and Spotify doesn’t want to be left behind. The company plans to spend up to $500 million on podcast investments, including strategic acquisitions, in 2019.
At the moment, podcasts are mostly monetized through advertising. The podcast advertising market in the US was valued at $169 million in 2016 and will reach $659 million by 2020, a study by the Interactive Advertising Bureau and PricewaterhouseCoopers predicts.
Obamas producing shows for Netflix
Last year, the Obamas also inked a multiyear deal to produce shows for Netflix (NFLX), the king of video streaming. Netflix finished the first quarter with 60.2 million paying subscribers in the US compared to 26.8 million for Hulu. The Walt Disney Company (DIS) and Comcast (CMCSA) are co-owners of Hulu with stakes of ~66% and 33%, respectively. AT&T (T) also owned a piece of Hulu but sold it a few months ago. Netflix signed the Obamas to supply it with shows after Disney said it would stop giving Netflix its content.