Spotify just gave Amy Schumer a $1 million podcast deal. Now what?

Last updated on May 28th, 2018

I saw the news break over Twitter and then immediately checked my calendar to make sure it wasn’t April Fools Day. Spotify reportedly gave comedian Amy Schumer $1 million to create a podcast for the platform. One. Million. Dollars. This is the first major haymaker deal I’ve seen in the podcast platform battle.

If you want to stop reading now, my thoughts can be summed up as: this could be a smart move by Spotify, but ultimately bad for my idea of podcast distribution.

A Smart Move by Spotify?

We’ve seen rivaling platforms fight for exclusive content for years now. The most glaring examples are between Netflix, Hulu, and cable competing for top tier talent. Netflix bought up several mainstream stand-up comedy specials, David Letterman, Ryan Murphy, and most recently Obama in their attempts to own original content and streaming. The other example to point to is with Spotify and their rivals. The Jay-Z backed, Tidal, famously held exclusive albums by Beyonce, Taylor Swift, Kanye West, and others. By bringing Amy Schumer on board, Spotify gets a talented creator to help draw prospective listeners from Apple (and other podcast apps) to Spotify’s burgeoning platform.

This isn’t necessarily a surprise. Digiday reported in early February 2017 they were actively seeking original podcast programs. Also, after talking with Cole Cuchna of Dissect, he disclosed Spotify had brought him and his podcast under their fold full-time. In Dissect’s case, new episodes get one week of exclusivity on Spotify before released to the general audience. For this amount of money, I’m assuming Schumer’s podcast will be 100% exclusive to Spotify but I could be wrong.

That said, one million dollars is a lot of money. Top tier podcasts can command a few million dollars per year in advertising revenue, however, none are limited to one platform. If Libysn’s, The Feed, is accurate, Spotify owns a little about 5.1% of the podcast market share. It’s doubtful Spotify could profit simply on ad revenue alone. But they also have their core subscription model to supplement the costs. Here’s some hypothetical number crunching.

If Schumer’s podcast can command $5M a year in ad revenue — if fully distributed —  that would equate to $250,000 if Spotify does indeed have 5% of the podcast market share. With $750,000 remaining to break even, they’d need 6,250 new Spotify monthly subscribers. These numbers aren’t all that gaudy, but they are bold and aggressive. After all Schumer is a stand-up comedian, not a podcaster, so it remains to be seen if her talents can draw a loyal (or at least curious) audience.

What This Means for the Podcast Industry

First and most obviously, money. Creators now have a north star to point to that clearly displays podcast value. It’s not only tied into ad revenue anymore, now your podcast itself has monetary value potentially to bid on from platforms. Though few will command 7-figure deals, this news does set a tangible benchmark to work from. This is great for podcast creators, however, it does come at a cost to the podcast industry as a whole.

Podcasts were created to be openly distributed through an RSS feed. Exclusivity ultimately threatens one of the basic tenets of podcasts. Though I think most listeners realized this free ride wouldn’t last forever — and with every “Netflix for podcasts” analogy I see online in my heart I knew it as well — it’s still a bit upsetting to see the stake in the ground (again, I’m assuming Schumer’s new podcast will only be available on Spotify).

If this new podcast isn’t only on Spotify, and has a format similar to Dissect or the New York Time’s Caliphate (platform exclusive for a period of time), then ironically, I like the deal a lot less for Spotify. I think there are very few podcasts that need to be listened to immediately, except current events podcasts like The Daily, Vox’s Today, Explained, Pod Save America, etc. The rest can be listened at your leisure. I’m a Dissect fan I’m also a paying Spotify subscriber, however, my preference for listening to podcasts on Overcast outweighs my impatience to listen right away. I don’t know how interested I’ll be in Schumer’s podcast when it ultimately arrives, but it wouldn’t be enough for me to sign up for Spotify or even listen on my existing Spotify account.

Another interesting takeaway is Apple’s (lack of) role in this. Their years of podcast market dominance, and subsequent complacency, has allowed others to chip away at the market. According to Blubrry’s PowerPress podcast, Apple’s market share in 2007 was 96.5%. Ten years later in 2017 it had fallen to just 55.5%. With Google’s renewed focus in the industry, as detailed in the Pacific Content series, this is likely to continue falling. If indeed we get to a three horse race between Apple, Google, and Spotify, these exclusive deals have a chance to silo the entire industry. This is a dystopian podcast world I’m not excited to live in.

At the end of the day, podcasters are in great shape for a nice payday as these increased monetization routes become fully fleshed out. A few years ago, podcasts had a much smaller audience, advertisers didn’t quite (and still kind of don’t) understand the channel and we’re willing to reach deep into their pockets. Today, in addition to advertising, podcasters have active Patreon accounts, are increasingly getting movie and TV adaptation deals, book contracts, live events, and now, buy-outs.

feature image credit: Slaven Vlasic/Getty Images