What happened

Shares of Spotify Technology (SPOT -0.89%) soared in October 2019. The provider of music-streaming services reported third-quarter results near the end of the month, transforming a quiet 6% October gain into a market-stomping 28.6% surge, according to data from S&P Global Market Intelligence.

So what

Spotify's third-quarter sales increased by 34% year over year to $2.0 billion. Adjusted earnings rose by 62%, landing at $0.62 per diluted share. The number of monthly average users rose 30% to 248 million, including 113 million subscribers to Spotify's premium service.

Management said that the strong results sprang chiefly from a successful focus on premium podcasts, where Spotify pledged to invest at least $500 million in buyouts of exclusive content creators this year.

A smiling young woman with headphones dances with one hand cupped to her ear.

Image source: Getty Images.

Now what

Spotify's own leadership can hardly believe how quickly the premium podcast idea is paying dividends. "Some of the increases are extraordinary, almost too good to be true," management said in the third-quarter earnings report.

The next few quarters will either prove that the company has found a sustainable business advantage in that space or show that the early success in 2019 was a fluke. The working theory so far is that premium podcasting is "something special" that should help Spotify stand out from an increasingly crowded field of streaming music services.