Spotify to Double Down on Ads


The mobile world we live in has caused huge changed in the entertainment industry as on-demand streaming services and quick to access titles have become the industry standard, this has led to a growing number of opportunities for advertisers as ads can be inserted into all forms of content – perhaps the most notable approach here has been within the gaming market as there has been a rapid rise in free titles that rely on ad revenue rather than game sales. This is also particularly true for services that rely on advertising for awareness, recently seen in the online gambling and betting industry at sites such as during lockdown measures certain restrictions had been put in place to limit player options through the growth of initiatives such as Gamstop, but where advertising has allowed new players to find these services.

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The latest big news for advertising, however, is coming from streaming giant Spotify – the company has made a number of large acquisitions lately including the podcasting staple Megaphone in a bid to continue its growth into the podcasting marketplace – picking up huge talents such as Joe Rogan and offering other podcasting opportunities to big names such as Michelle Obama too. But these big deals come at a cost, the acquisition of Megaphone has reportedly cost $235 million, having Joe Rogan move to Spotify reportedly another $100 million, and outside of the ongoing subscription costs, how is much of this covered? It seems the answer moving forward may be unavoidable ads.

In a move that may seem controversial to many, it has been reported that with this new pickup and a push for more podcasting options, the content creators themselves will be able to include midroll ads during the podcast whether these are pre-recorded or done during the recording, regardless of whether or not you own a premium subscription or not. Some other suggestions have also been flirted that listeners may have the option to pay an additional sum to avoid these ads entirely, but that is still up in the air.

This could cause an interesting change – other platforms have already come under scrutiny for doing the same as popular streaming service Twitch had recently ran into its own troubles with unavoidable advertisements that even the broadcasters weren’t aware were happening, and during a period of time where many users are looking for reasons to cancel the growing number of services they’re subscribed to, adding  additional costs to avoid adverts that many pay for to avoid already could be detrimental to the platform. Nothing is set in stone yet and most of the fear comes from the churning rumour mill, but it’s difficult to miss the patterns that are starting to show and it has many worried – Spotify have built a somewhat monopoly on the music streaming industry and there are few that can challenge the size and library, if ads do become non-skippable or unavoidable, it may leave many to seek out a suitable alternative that may not exist.

David Curry

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