'White Noise' Podcasts Are Costing Spotify Green

Spotify is reportedly missing out on $38 million in annual profits because its users can’t stop listening to “white noise” podcasts that are less lucrative for the company.

“White noise” podcasts, which feature calm and relaxing sounds such as falling rain, crashing waves or just plain static, generated a whopping three million daily consumption hours on Spotify as of January, according to an internal document obtained by Bloomberg.

The podcasts are purportedly so popular that Spotify considered nixing them from the streaming service entirely and redirecting users to music from the likes of Drake or Ed Sheeran and other “comparable programming” that is more cost-effective from a revenue perspective.

Spotify’s annual gross profit would increase by an estimated $38 million if the company removed “white noise” from its “talk” section, blocked future uploads and nudged users toward other audio content, according to an internal analysis, reports The NY Post.

Ultimately, the company decided not to follow through on the move. For now, white noise is still available on the platform in podcast form.

“The proposal in question did not come to fruition — we continue to have white noise podcasts on our platform,” a Spotify spokesperson said in a statement.

Bloomberg noted that the podcasts were “inadvertently boosted by Spotify’s own algorithmic push for “talk” content (versus music)” – at the expense of the company’s bottom line. The outlet previously reported that white noise podcast “hosts” could earn $18,000 per month in ad revenue.

Spotify shares have surged more than 60% since January. The stock is still up for the year even after dismal second-quarter results that came in well below Wall Street’s expectations.

The music streamer reported a larger-than-expected net loss of $333.4 million or $1.71 a share. That was an increase compared with a year-ago loss of $138 million or 94 cents a share.