People walk by the New York Stock Exchange (NYSE) on the morning that the music streaming service Spotify begins trading shares at the NYSE on April 3, 2018 in New York City.Spencer Platt | Getty ImagesSpotify’s multimillion-dollar bet on podcasting may not be working out, Citi analysts wrote in a note to clients Friday.”The cadence of Premium gross additions (through 3Q20) and app download data (through 4Q20) do not show any material benefit from recent podcast investments (that began in 2019),” the analysts wrote. The firm downgraded the stock to sell from neutral.Spotify’s stock was down more than 6.5% in the afternoon.Spotify kicked off its venture into podcasting in early 2019, after acquiring podcast companies Gimlet Media, Anchor and Parcast. Since then, the company has bought sports and entertainment news company The Ringer, as well as Megaphone, which will bolster its ad tech business. It also spent what’s likely millions gaining the exclusive rights to stream celebrity podcasts, including those from Joe Rogan, Kim Kardashian West, Michelle Obama, and The Duke and Duchess of Sussex.The idea was that by bringing exclusive content to the app, the company could strengthen its advertising business as well as bring in Premium subscribers. Investors seemed to like the message, sending the stock up 31.76% in 2019 and 110.4% in 2020.But now analysts are looking for the company to show the investments were worth it.”To date, we have not seen a material positive inflection in app downloads or Premium subscriptions,” the Citi analysts wrote.”If we were to see a material positive inflection in app downloads or Premium subs (from higher gross adds or materially lower churn), we would alter our view,” they added. “But, our fear is that if podcasting doesn’t provide a way for Spotify to shift away from music label dependence, the Street may reassess the underlying value of the business. And, that would be bad for Spotify’s multiple and equity value.”Subscribe to CNBC on YouTube.