YouTube Has Become The Biggest Podcasting Platform

When Spotify executives were negotiating with Joe Rogan in 2020 to make his podcast exclusive to its service, it ran into an issue: what to do about YouTube.

Business Insider reports Rogan had been posting full episodes of his show to his YouTube channel and making big money on the platform from his share of the ad revenue. As the sides tussled over the size of the deal, a major reason it reached such an eye-poppingly large sum — over $200 million for around three years of exclusivity, according to The New York Times — was because Spotify had to compensate the podcaster for the YouTube money and audience he'd be losing, according to three people familiar with the matter.

The Rogan deal also led to Spotify scrambling to create a video player on the app, so Rogan had a place to post videos of his show and keep his former YouTube audience happy, these people said.

The details of YouTube's role in the podcast deal, which haven't been previously reported, illustrate a surprising development in the podcasting world over the past few years: YouTube has become a juggernaut. Two recent surveys, one by Cumulus Media and one by Voices, showed that YouTube was the most frequently used podcasting platform, edging out Spotify and Apple's podcasting apps.

Even more surprising, the video service has done next to nothing to make it happen.

The story of YouTube and podcasting is another example of how the site's gravitational field among creators and users has unintentionally pulled parts of the media world into its orbit. Its appeal to Gen Z and its features to help creators reach broad audiences and generate ad revenue — along with the added tailwind of the pandemic — helped YouTube accelerate its growth in podcasting. 

It's similar to the way YouTube organically became the world's largest music platform simply from users uploading music onto it. Now the podcasting world is wondering how hands-on YouTube will be with its growing status as a platform, how it will impact competitors, and whether it views the podcasting business as meaningful enough to make substantial investments. 

Last year the entire podcasting industry made $1.4 billion in ad revenue and is set to surpass $2 billion this year, according to the Interactive Advertising Bureau. It's a quickly growing industry but still a drop in the bucket compared to the $29 billion that YouTube made in ad revenue in 2021, or the $209 billion that Google ads made.

Inside Spotify, employees view YouTube as its biggest threat, according to two people familiar with the matter. And the heat has intensified as YouTube takes more steps to be active in podcasting. Last Wednesday, it rolled out a podcasting home page on its website and announced a deal with NPR to post shows like "Fresh Air" and "Up First" on the platform.

The company appointed YouTube veteran Kai Chuk as its first head of podcasting just last year. This spring, a report in Podnews published a leaked slide deck showing YouTube's podcasting plans to give users enhanced metrics, a path to uploading content through an RSS feed, and more audio-only ads. 

YouTube podcasts attract Gen Z

There's also a generational aspect to the trend. Millennials and older generations have been consuming podcasts for years, but Gen Z listeners see queuing up an episode through an audio app like Apple or Spotify as a thing old people do, according to podcast executives.  

Meanwhile, YouTube and TikTok remain the most popular social-media apps among young people, so Gen Z comes to podcasting as a video-first medium. It explains why already famous Gen Z stars like Logan Paul launched highly popular podcasts in the past few years.