Just over a year after Spotify (NYSE:SPOT) first announced a partnership with President Barack Obama and Michelle Obama's production company, Higher Ground, the company this week said that the first new series from that deal will be The Michelle Obama Podcast. The exclusive title will launch on July 29. Financial terms regarding the partnership were never disclosed.
Spotify shares jumped on the announcement yesterday, despite broader market declines.
The first of many
The Michelle Obama Podcast will be a general-interest show in which the former First Lady discusses interpersonal relationships, current events, and a wide variety of other broad topics. Obama will interview a mix of special guests with expertise on those issues.
It is an extraordinary privilege to have @MichelleObama Podcast as the first series from our multi-year deal with former President Barack and First Lady Michelle Obama. Episode one debuts in just thirteen days, only on Spotify! https://t.co/Mc7MfbWXcr— Daniel Ek (@eldsjal) July 16, 2020
The show will be available for all free users and premium subscribers, like all other podcasts on the audio-streaming tech platform. The Michelle Obama Podcast is the just the first podcast to come out of the multiyear partnership, with more content expected to be in the pipeline.
The Obamas founded Higher Ground in 2018 and released its American Factory documentary on Netflix, which proceeded to win an Oscar earlier this year.
The streak continues
The news adds on to Spotify's recent string of exclusive podcast deals, following the Joe Rogan exclusivity deal, worth an estimated $100 million, announced in May. Last month, the company inked another deal with AT&T's WarnerMedia to produce original podcast series with DC superheroes like Batman and Wonder Woman. The streaming specialist also reportedly signed a contract with Kim Kardashian West for a true-crime series.
While that last deal has not been formally confirmed or announced yet, Spotify Chief Content Officer Dawn Ostroff recently told CNBC that true crime is the biggest genre of podcast content, making it a critical category to focus on as the company builds out its catalog of original podcasts.
Investors are enthused about podcasts because of the potential to contain costs, as hefty royalties associated with music streaming hinder profitability as well as scalability since those expenses are variable in nature. Podcast production costs, on the other hand, are relatively fixed. However, competition is also intensifying: Apple has started to ramp up its defensive strategies and SiriusXM just announced that it was acquiring competing podcast platform Stitcher for up to $325 million from E.W. Scripps.
Overall U.S. podcast advertising revenue is expected to top $800 million this year, according to recent estimates from IAB. That may not seem like a large market to go after, particularly in the context of Spotify's market cap increasing by $20 billion since May, but the company is confident that the aggressive push into podcasts is boosting conversion rates of free users into premium subscribers.