Spotify’s decision to double down on podcasting appears to be paying off.
The music streaming company said its podcasting audience grew over 50% in the quarter from the previous quarter and that its ad revenue jumped 31%. Over the past year, Spotify has spent $408 million to acquire three podcasting companies—Anchor, Parcast and Gimlet—to become a leader in podcasting. As a result it has seen an increase in podcast advertising, the company said. The company has tens of millions of users streaming podcasts.
Spotify relies on its ad-supported free music service as an entry point to get users in and then convert them to paying subscribers. And while the bulk of Spotify’s revenue is from subscription fees users pay, ad revenue remains a key opportunity for growth.