The Ledger: Spotify Beats SXM Media to Top Podcast Network Rankings

The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.

With the help of ratings juggernaut Joe Rogan, Spotify topped SXM Media — just barely — in Edison Research’s Q2 2022 podcast network rankings, covering April 1 to June 30, after taking the runner-up position the previous two quarters.  

The streaming company has made Rogan’s podcast, The Joe Rogan Experience, a cornerstone in its efforts to expand the audio platform beyond its music roots. If Rogan’s role was to help make Spotify a podcast leader, he accomplished his mission. “Rogan is not the only reason they’re no. 1, but he’s the main reason,” says Edison Research president Larry Rosin.  

For all the controversies — from accusations of racism to Neil Young‘s demand that Spotify pull his catalog over Rogan’s comments about COVID-19 — TJRE has delivered an audience like no other podcast. Rosin compares Rogan to Aaron Judge, whose 57 home runs is 20 more than the next best hitter in major league baseball, and American Idol, which in its prime could have lost half its fifth-season audience and still rank in the top 10 shows on television. “That’s kind of what Rogan is to the rest of the field in podcasting,” says Rosin.  

That said, Spotify’s lead over SXM Media is tenuous because networks regularly gain and lose shows, which means their market shares are in flux. “That’s part of what happened,” says Rosin. “SXM had a bunch of shows come out,” such as Exactly Right Media switching from SXM Media to Amazon’s Wondery (taking its flagship podcast, the No. 5-ranked My Favorite Murder). “That was really the difference,” he says. It was enough to allow Spotify to nudge out SXM Media “by a tiny margin.” 

Topping Edison’s podcast network rankings is a notable achievement for a music-first company that is pushing hard to build a broad audio platform. The company sees spoken-word audio as a necessary means to help deliver the growth Spotify’s investors expect. Not only can podcasts help attract and retain subscribers, but they can also provide additional advertising revenue. As its podcasting business scales, it can improve upon music margins that are surrendered to licensing deals with record labels. In Spotify’s June 9 investor presentation, Spotify executives said the company can achieve podcast gross margins of 30-35% within three to five years and sees 40-50% as attainable further in the future. In 2021, Spotify’s podcast business left a $103 million negative impact on gross margin.    

Spotify has spent handsomely on podcast-related acquisitions for content creators The Ringer, Parcast and Gimlet and technology platforms Anchor and Megaphone. That’s not including exclusive licensing deals for TJRE, Call Her Daddy, Barack and Michelle Obama‘s Higher Ground (which left for Amazon’s Audible in June), DC Comics and others.  

SXM Media is the sales organization of SiriusXM Holdings Inc. and covers three companies: SiriusXM, Pandora and Stitcher, a podcast platform. It has some of the most popular podcasts in the U.S., including No. 2 Crime Junkie, No. 10 Office Ladies, No. 11 Dateline NBC, No. 18 Pod Save America and No. 23 WTF with Marc Maron. In all, SXM Media has seven of the top 30 podcasts in Edison’s Q2 2022 ranking.

Spotify has only two shows in the top 30: The Joe Rogan Experience and Call Her Daddy. But both shows are in the top 10 — Call Her Daddy is No. 8 — and Spotify has both exclusively through lucrative licensing deals. It has one other podcast in Edison’s top 50: Reply All, from Spotify-owned Gimlet, which ranks No. 49.  

But for Spotify, success in podcasting isn’t necessarily reflected in its position on Edison’s podcast ranking chart. Spotify needs a wide range of shows to be interesting to ad buyers, says James Cridland, editor of Podnews, in an email to Billboard. “Total time spent listening is important when it comes to revenue, and this is something that Edison Podcast Metrics doesn’t measure.”  

This is where Spotify’s acquisitions of Anchor (in 2019) and Megaphone (in 2020) come into play. Anchor gives creators tools to make their podcasts; Megaphone distributes the podcasts and sells advertising. In June, Spotify had over 4 million podcasts on its platform, up from 500,000 in 2019, and 75% of them come from Anchor, said Maya Prohovnik, Spotify’s head of talk verticals, at the June 9 investor presentation. By owning two podcast hosting companies and publishing a wide range of shows, “Spotify has access to both the big hits and the breadth of content that will help them achieve both a high number of total audience and a wide range of different shows,” says Cridland. 

Just as hit-focused major record labels have built businesses around selling and distributing music’s long tail, Spotify is tapping into the value of podcasting’s ocean of niches and less-than-mainstream content. In May, Edison found that more than half of all listening in the top thousand podcasts is happening in the top 100. “That doesn’t mean they aren’t avid audiences,” wrote Rosin, “and it certainly doesn’t mean they are not monetizable audiences.” Outside the top thousand podcasts are hundreds of thousands of creators with millions of episodes. Each title by itself has a small audience, but in aggregate they can make a noticeable difference on Spotify’s bottom line.  

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