Spotify's new button could destroy the podcast industry
The podcasting industry is facing a major threat as Spotify introduces a 'Skip Ahead' button, allowing users to bypass ads. This feature risks collapsing the business model that sustains creators.
The podcast field has been at a peak of popularity in recent years with lucrative contracts, impressive listening figures, and a flourishing of podcast networks — including in Israel. But the economy that drives the entire field relies on one central thing: advertisements and host sponsorships. Now, a new update from Spotify threatens to collapse the business model that allows creators to continue recording, and puts the entire industry in real danger.
A dream for some, a nightmare for others
In recent days, Spotify has launched a button that sounds like a dream for users but a nightmare for podcasters. According to a report by Semafor, last week a new button called Skip Ahead began appearing for some Spotify users, which, as its name suggests, skips forward over the part that is most important to podcasters and most annoying to listeners — the ads.
According to the report, the new button can help skip personal promotions by podcast hosts (we love you, American comedians, but we won't make it to the show in Boise, Idaho), or content that is not necessarily part of the episode. For example, the hosts' promotion of other content in the podcast network or an invitation to a live episode recording. The report also indicates that the new button is simply a more convenient way for users to deal with ads, unlike repeatedly pressing the existing button, which allows skipping 15 seconds forward.
Spotify reassures, but keeps its share
According to the report, several large podcast networks have already complained to the Swedish streaming giant about the move. Tommy Vietor, co-founder of the Crooked Media podcast network, phrased it very directly in a post:
"Really cool of Spotify to try and destroy the podcast industry. What a great partner!"
Spotify claimed in private conversations with executives that the changes would only increase the number of listens, because listeners would hear more content. The company even noted that the button they launched is already starting to have a positive effect on podcast listening figures. At the same time, Spotify left itself an opening for a kind of U-turn, noting that it is still a feature in the initial testing stages and it continues to collect feedback from all parties in the chain — podcasters, advertisers, and listeners.
It is important to note that the new button is a feature that currently comes only to Spotify premium subscribers. In addition, the feature currently affects only external ads, and Spotify will not allow users to skip ads sold through its own advertising platform. As a reminder, the company has worked with an advertising model from its first day, with spots it plays between songs and in podcasts for users on the free plan.
A large part of the listens
It is difficult to know exactly what Spotify's share of the global podcast listening pie is, but estimates range from a third to half of all listens, so the impact of such a possible move is huge. In Israel, already 5 years ago we reported that Spotify is responsible for about a third of podcast listens, but since then its share has grown, and according to industry sources, its market share has already crossed 50% and almost 2 out of every 3 podcast listeners do so using Spotify. Yes, despite the terrible player, which also caused us to leave it.
