Spotify's New AI Bet Could Be a Game Changer for Podcasting

Since 2019, the world's largest audio streaming company, Spotify (SPOT 0.73%), has been pouring money into the podcasting space with hopes of diversifying its business away from purely music streaming. These investments have included acquiring podcast studios, paying for exclusive shows, and even buying entire podcast distribution platforms like Megaphone and Anchor in an effort to bolster its advertising revenue.

However, Spotify's podcast initiatives have drawn plenty of criticism from investors because the company's strategy has continuously shifted and the gross margin has remained negative across its advertising division.

But despite these lackluster results, the company continues to believe there is a large opportunity in the podcasting industry. And last week, Spotify introduced a new program that could have big implications in the long run.