The debut of the Spotify Audience Network, however, put that report into perspective. Instead, Spotify itself was found to be the main sponsor for Anchor advertising to date. The news had shortly followed an investigative report by The Verge, which found that Anchor was struggling to find sponsors for smaller podcasters, as it had promised to do. The company described the new platform as a potential game changer for the world of podcast monetization, as it would give advertisers tools to reach the Spotify audience of hundreds of millions. Support for Anchor had been previously announced when Spotify first unveiled its plans for the Spotify Audience Network back in February during its “Stream On” live event. Today, the company is launching access to the Spotify Audience Network to creators who use its Anchor podcast publishing tool in the U.S. Podcasting could enable Spotify to reduce labels’ cut of its sales since they get paid based on their share of overall listening.Earlier this year, Spotify introduced its new audio advertising marketplace, the Spotify Audience Network, which allows advertisers to reach audiences across Spotify’s ad-supported music and original and exclusive podcast programs, as well as third-party podcasts from Megaphone publishers, all in one place. Lowering costs is another reason Spotify likes podcasts. Spotify doesn’t expect to lower record labels’ share of its sales in these talks, as it did the last time, Chief Financial Officer Barry McCarthy said in an interview. Spotify is in the midst of negotiating new long-term contracts with the three major record labels, its biggest suppliers. One reason may be that Spotify doesn’t expect to get much relief from music companies. “Why are they guiding to such low gross margins?” “This is not about the fourth quarter, it’s about the guidance,” said Anthony DiClemente, an analyst who tracks the company for Evercore ISI. Investors have been upbeat about Spotify’s prospects, sending the stock up 23 percent this year. Spotify also said its average revenue per user had fallen by 7 percent. The company’s shares sank as much as 8.9 percent to $127.05 in premarket trading Wednesday because the company forecast lower profit margins in the coming year. Margin Concernsīut investors were more concerned about Spotify’s projections for 2019. Spotify grew its user base by nearly 30 percent last year despite growing competition from Inc., Apple and Alphabet Inc.’s YouTube.
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