I'm sure it boils down to money ultimately, but it can't be the way you suggest here.
The thing is that Spotify does not pay per play! The royalties lobby love to give the impression that they do, because it makes it look like Spotify is fleecing them.
Spotify pays percentages of what it itself collects in subscription fees. If a record company owned 10% of everything that was listened to on Spotify this month, they would make _the same_, regardless of how many absolute seconds their stuff was listened to.
So, more listening to podcasts does not mean Spotify has to pay out less. How much they have to pay out in total is fixed as a share of their subscription (and ad) revenue anyway, in multi-year, industry wide contracts with copyright owners.
There are ways Spotify could circumvent this, such as promoting content they covertly owned themselves, or content whose owners gave them kickbacks of some sort. There's some indication they do such shady things. But podcasts don't change this equation much.
I think Spotify's promotion of podcasts is simply good old fashioned loss-leading monopoly building. They're hoping that Spotify will become where listeners go for podcasts since that's where all the podcasts are, and also the place podcasters go because that's where all the listeners are.
That is a great point about loss-leading a future monopoly and of course a factor.
This isn't a hill I will die on by any means, but if you read Spotify's write up on royalties[0], they pay out based on stream share of the overall platform, on a monthly basis. E.g. If Columbia Records gets 10% of streams for a month, they get 10% of the pool of $ Spotify distributes. Now, like you said they likely have some shady practices - I would imagine Spotify has an incentive to create music like study and sleep beats themselves as those playlists get hit for 8 hrs at a time and it doesn't really matter who created the beat as long as it helps you study or sleep.
They do not indicate in [0] that podcasts are excluded from stream share. Even if they aren't included in stream share now, I'd imagine long term they very much intend for podcasts and music to be lumped into the same stream share model to drive payouts down.
The thing is that Spotify does not pay per play! The royalties lobby love to give the impression that they do, because it makes it look like Spotify is fleecing them.
Spotify pays percentages of what it itself collects in subscription fees. If a record company owned 10% of everything that was listened to on Spotify this month, they would make _the same_, regardless of how many absolute seconds their stuff was listened to.
So, more listening to podcasts does not mean Spotify has to pay out less. How much they have to pay out in total is fixed as a share of their subscription (and ad) revenue anyway, in multi-year, industry wide contracts with copyright owners.
There are ways Spotify could circumvent this, such as promoting content they covertly owned themselves, or content whose owners gave them kickbacks of some sort. There's some indication they do such shady things. But podcasts don't change this equation much.
I think Spotify's promotion of podcasts is simply good old fashioned loss-leading monopoly building. They're hoping that Spotify will become where listeners go for podcasts since that's where all the podcasts are, and also the place podcasters go because that's where all the listeners are.