Spotify's Audio-First Strategy: Leading the Podcasting Market

Teaching Note for HBS Case No. 721-439. Within 15 years, CEO Daniel Ek had led Spotify from an ambitious startup to a multi-billion dollar company that had transformed the music industry. As part of Spotify’s next phase of growth, the platform would invest heavily in the burgeoning podcast industry. The strategic shift to focus on audio broadly, as opposed to solely on music, presented new challenges. Several monetization models have emerged in this nascent industry, including ad-supported, platform-wide subscription and podcast-specific subscription models. Which monetization model should Spotify adopt to make its podcast business profitable, and how would that choice impact the content it could offer? In light of the tense political climate at the time, Spotify’s approach to content regulation, including its response to hate speech and misinformation, would be scrutinized heavily. Having invested hundreds of millions of dollars to grow Spotify’s podcast arm already, Ek’s decisions would have consequences not only for Spotify but also for the podcasting industry at large.