Spotify’s leaders have been insisting that its podcasting arm had a path to profit for a long time. The difference now, it seems, is that investors believe them. After utterly transforming its podcast business with cuts that have improved margins and shaken the industry, the company’s stock is trading above $230 for the first time in more than two years. 

It has been a year of drastic changes, and Spotify’s podcast business is almost unrecognizable. Nearly every executive who pioneered the vertical is gone, including top podcasting chief Dawn Ostroff. Its CFO, Paul Vogel, is on his way out. It collapsed Gimlet and Parcast, two pillars of its content strategy. Through three rounds of layoffs, it cut staffers brought in during its M&A spree not only in content but also in advertising and product as well. It killed off its Clubhouse competitor, Spotify Live. And just last week, it abandoned exclusivity even for its top podcast stars, Alex Cooper and Joe Rogan.

Ek said that the exclusivity model served its purpose. “What we’ve been able to see here, as we’ve been learning over these past few years, is that while some of these exclusivity deals worked, generally, it wasn’t aligned with what the creator wanted,” he said. “Exclusivity makes sense when you’re the smaller player trying to gain scale. When you’re the bigger player, the additional value of the exclusivity is far smaller than it is about being aligned.”

He also downplayed the magnitude of Spotify’s former exclusivity strategy, noting that not all podcasts were exclusive to the platform. That is true in the case of The Ringer. But according to a report from Semafor, in 2021, Ostroff tried to limit those shows to the platform as well. Based on what happened at Gimlet and Parcast, it’s very good that she didn’t.

The Ringer has proven the most resilient studio within Spotify, and it seems that its strategy is being applied more broadly: be in as many places as possible and get as much ad money as possible. It’s not revolutionary — it’s the default for podcasting. But according to a note from Wells Fargo analyst Steven Cahall, that new cash flow (paired with lower minimum guarantees, as is reportedly the case with Rogan’s $250 million deal), should have significant upside for the streamer.

It’s not there yet. Spotify is still operating at a loss (though a smaller one than investors were expecting). The audiobook vertical has still not quite found its footing and may not unless Spotify gets the upper hand over Apple and its App Store policies. Plus, Ek said that the company is still looking for “efficiencies,” so you know what that means. 

But the company offered stronger guidance than expected for the first quarter of 2024, and investors are thrilled. As for the podcasting industry, that’s another story.