“Warner India is about a global license agreement; it’s not really about India,” he said. “And Saregama, we have constructive relationships. We have confidence that will be resolved.”
Spotify, which began in 2008, has recently gotten in on the podcast boom. In February, the company paid about $340 million for two podcast companies, Gimlet Media and Anchor, and in March bought another, Parcast, for $56 million. Daniel Ek, Spotify’s chief executive, has said “non-music content” will eventually make up 20 percent of the service’s offerings.
That change could help Spotify reduce its dependence on major record labels, and improve its profit margins, since it can be cheaper to stream podcasts than music, particularly podcasts Spotify controls.
But it may take time for podcasts to have the desired effect on Spotify’s bottom line. The company’s gross margin was 24.7 percent for the quarter, down from 24.9 percent a year earlier and 26.7 percent for the fourth quarter of 2018.
Mr. McCarthy said Spotify’s investments in podcasts had created “a great deal of downward pressure on margins, at least initially as we built out the business.” In an earnings call with investors, he and Mr. Ek also noted that lower subscription prices in markets like India tended to reduce the company’s average revenue per user, a closely watched metric.
On the call, Mr. Ek sounded optimistic that Spotify would continue to dominate the industry, even as it pursues an antitrust complaint against Apple in Europe related to what it contends are its rival’s anticompetitive practices. Spotify has faced tough competition from the start, Mr. Ek said, and there is still plenty of room for growth.
“The music industry market,” he said, “is just way bigger than people realize.”
Article source: https://www.nytimes.com/2019/04/29/business/media/spotify-100-million-subscribers-apple-podcasts.html?partner=rss&emc=rss
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