Spotify will no longer allow white noise creators to participate in its Ambassador Ads program. The program is a way to monetize podcasts by "spreading the word" to listeners about Spotify for Podcasters, the company's podcasting platform. The company, which was originally a music streaming platform, has made this move in an attempt to decrease it's spending on such podcasts since they serve as background noise rather than active content for the listeners.
For starters, white noise aka ambient sound often involves looping repetitive and monotonous sounds such as rain, waves on a seashore, and more over a period of time that people may use to relax, reduce stress, meditate, or even as an aid to sleep.
As per an anonymous Spotify insider speaking to Bloomberg, the company felt like its marketing money wasn't well spent. Another Bloomberg report from last year reported that white noise podcasters earn as much as $18,000 per month, most of which comes through ads placed by Spotify. These shows accounted for 3 million daily consumption hours on the platform which ultimately hurt Spotify's annual profit by $38 million.
The change will go into effect starting October 1 this year. It is also raising the threshold needed for all podcasters to be eligible for these ads to 1,000 unique Spotify listeners over a 60-day period, which is a significant bump from the previous threshold of just 100. White noise podcasters can still make money through other means of monetization such as paid subscribers, listener support, and even automated ads.
Spotify is currently testing its automated ads program where it is inserting third-party ads into shows automatically like those on YouTube and is also inviting more conventional podcasters to participate in this program. The company also said that it will split revenue on these automated placements in half rather than them being at a flat rate as before.
Source: Bloomberg (paywall)