Over the last 18 months, Spotify (NYSE:SPOT) has been pushing to expand its platform from a music-streaming service to all types of audio. Podcasting has been a major focus, and led CEO Daniel Ek to acquire companies like Gimlet, Anchor, Parcast, and The Ringer, as well as sign exclusive contracts with big names like the Obamas.

Spotify's latest deal could accelerate the growth of its podcast audience. The Joe Rogan Experience is coming to Spotify, and will be exclusive to the platform by the end of the year. That's a big blow to Apple, which sports the most popular podcast listening app.

With The Joe Rogan Experience garnering over 190 million downloads per month, Spotify should see a flood of podcast traffic start coming in as Rogan starts telling his listeners that it'll soon be the only place they can find all of his content.

Joe Rogan wearing headphones behind a microphone.

Joe Rogan. Image source: Spotify.

An exclusive with an established audience

Spotify's new deal with The Joe Rogan Experience has the potential to have the biggest immediate impact of any of its podcast deals so far. 

Spotify has bought several media companies with built-in audiences, including The Ringer and Gimlet, but it hasn't made those companies' existing podcasts exclusive. Meanwhile, it's created some exclusive podcasts with big names, like Amy Schumer and Joe Budden, but those personalities don't have an established audience in podcasting.

The exclusive license for The Joe Rogan Experience combines those two factors -- built-in audience and exclusivity -- which should result in a significant spike in interest for Spotify's podcast section. 

People seek out The Joe Rogan Experience. "The talk series has long been the most-searched-for podcast on Spotify," the company said in a press release. That's despite the fact that the show isn't even on Spotify's platform yet.

That said, all Spotify can hope for from the deal is for the podcast to draw in new listeners. It still has to show them the value of its platform versus its competitors like Apple. Highlighting exclusive content or a differentiated listening experience will be key to winning over listeners permanently.

The value of podcast listeners to Spotify

Spotify's increasing investments in podcast content and technology are based on management's belief that podcast listening produces a boost to "usage, engagement, and retention across both Ad-Supported and Premium," as it wrote in its first-quarter letter to shareholders.

Spotify also says it's seeing increased conversion from free to paid users. So, while it might not collect ad revenue from most podcasts today, it can still benefit financially from the increased listening on its platform. (Note: it's unclear whether Spotify will collect ad revenue from ad sales from The Joe Rogan Experience.)

Longer-term, Spotify also has the potential to grow its share of ad sales from podcasts -- both those it owns and those it merely hosts. The company unveiled Spotify Podcast Ads earlier this year, which uses its streaming ad insertion technology to dynamically insert ads into podcasts instead of relying on broadcasting the same ads to every listener. The technology has the potential to increase average ad prices for podcasters, and Spotify would be able to take a percentage of sales from every podcast that uses it.

For now, Spotify is still very focused on building up its audience. Nineteen percent of its 286 million monthly active users listened to podcasts in the first quarter. That number is climbing steadily, but still has a long way to grow.

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