Spotify podcast strategy: case for podcasts before audiobooks and how to measure success

Imagine you are a product manager on Spotify's podcast team, looking back on the decision to bring podcasts into the app. Answer three questions about that decision. ### Clarifying Questions - Should the answer explain the first addition of podcasts to the catalog, the later push into creator tools and exclusive shows, or both? - Since I cannot know what the team argued internally, may I reason from public information and first principles? - Should success be judged on the podcast product alone (listening and creators) or on Spotify's wider business, such as retention, conversion to Premium and margin? ### Part 1 — The case for podcasts Explain why it made sense for Spotify to add podcasts next to music. ```hint Compare the economics Contrast what Spotify pays out for an hour of music with what it pays for an hour of a typical podcast, then consider what a weekly episode does for how often people open the app. ``` #### What This Part Should Cover - Listener needs that podcasts meet and music does not - The business case, including content costs and ways to make money - How podcasts change Spotify's position against competitors ### Part 2 — Podcasts before audiobooks Explain why podcasts came before audiobooks. ```hint Line up the two formats Compare how each format's content is sourced and licensed, how often new content appears, and how each fits a flat monthly subscription. ``` #### What This Part Should Cover - Differences in licensing, supply and pricing - Differences in listening frequency and habit - How launching podcasts first lowered the risk of a later audiobook launch ### Part 3 — Measuring success Which metrics would you use to track whether podcasts are succeeding? ```hint Value, business and side effects Separate signals that listeners and creators value podcasts from signals that podcasts help the business, and ask what podcast listening might take away from music. ``` #### What This Part Should Cover - A north-star metric tied to the goal from Part 1 - Supporting metrics for listeners, creators and the business - Guardrails, including the effect on music listening - How to credit outcomes to podcasts when heavy users are the ones most likely to adopt them ### What a Strong Answer Covers - One goal that connects the reasoning in Part 1 to the metrics in Part 3 - Arguments grounded in Spotify's economics and competition, with public facts kept apart from speculation - A two-sided view that includes creators as well as listeners - Clear trade-offs and risks, such as the cost of exclusive shows and clutter for music-only listeners ### Follow-up Questions - Exclusive deals with famous shows are expensive. How would you decide whether to renew one? - Music-first listeners complain that podcasts crowd their home screen. How would you respond, and which metric would tell you whether the complaint matters? - Using what podcasts taught the team, how would you plan the audiobook launch and its success metrics?