How Spotify Investors Will Know If Its Podcast Strategy Is Working
Spotify (NYSE: SPOT) is spending $500 million on podcasting technology and content this year. It's acquired various media and tech companies as well as signed several celebrities to create exclusive podcasts for the platform, including Amy Schumer, Joe Budden, and the Obamas' Higher Ground production company.
In the short term, investors will see a negative impact on the company's gross margin. Management forecasts margin contraction in the second half of 2019 as it increases its investment in podcasts.
Meanwhile, the biggest advantage management holds up for growing podcasts is improved engagement on the platform. But since Spotify doesn't disclose average time spent per user on its platform, investors may be left guessing how the company is doing. So, what's the best indication of whether or not the podcast investments are paying off?
Source Fool.com
