Spotify Loses $38 Million Per Year Because Of A 'White Noise' Problem

White noise is when a random signal having equal intensity or spectrum is observed at a range of different frequencies that are relevant to the context.

This should give the sound a constant power of spectral density.

To most people at least, white noise is known as a common synthetic noise source, which has a static-like sound capable of masking loud disruptions. This masking effect can help these people sleep better.

But not for Spotify.

The Swedish audio streaming and media services provider said that it is losing a lot of money because of this sound.

Spotify

According to reports, white noise and ambient podcasts are adding up to a staggering 3 million daily consumption hours on the music platform, as of January 2023.

While this is certainly a win for Spotify, the company is losing in another sector.

Content creators upload hours upon hours of white noise, seemingly aimed at listeners who are asleep, some of them are making as much as $18,000 a month by placing ads in these episodes.

They're earning huge money after their podcasts were "inadvertently boosted by Spotify’s own algorithmic push for 'talk' content (versus music)."

But Spotify, which makes most of its money by pushing users into paying for its music subscriptions, cannot really profit from them.

Since the ratio of its paid-to-free listeners in free falling, Spotify cannot rely monetize from people who spent many of their time listening to the hours-long white noise.

With huge footing on Spotify, the platform said that it's losing profit because of this trend.

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Spotify, white noise

Soon after realizing this trend, the platform reportedly considered tweaking its algorithms and features to nudge users away from white noises.

However, this plan never really panned out.

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

But still, after it concluded that shifting users away from white noise programming could net the company an additional $38 million in profit per year, some uploaders began noticing how some of their white noise podcasts have vanished, sometimes without warning.

"We can’t speak to the specific episodes," said the Spotify spokesperson. "We routinely run tests and are in contact with creators on a case by case basis."

It's worth noting that apart from experiencing a flood of white noise, Spotify has also been dealing with a tsunami of AI-generated music. And just like before, the streaming platform is still dealing with bots that artificially inflate its listener count.

White noise

White noise is indeed a vibe of its own.

While some prefer listening to songs and music from their favorite artists, some others love to listen to white noise that can be soothing and sedating.

Either to sleep or for study and work, the sound of static or falling rain, for example, white noises have their own fans.

In the past, white noise has already stirred considerable controversy in the music industry.

Executives at major record labels have complained that tracks by reputable artists are being assigned the same value as those uploading just noise.

"It can’t be that an Ed Sheeran stream is worth exactly the same as a stream of rain falling on the roof," said Warner Music Group CEO, Robert Kyncl to Music Business Worldwide earlier this 2023.

Universal Music Group’s CEO Lucian Grainge also voiced his displeasure at the fact that songs filled with white noise are paid out of the same royalty pool shared by their superstars.