Sydney Morning Herald

What Spotify's big podcast purchases mean for the future of the medium

Sydney Morning Herald logoSydney Morning Herald 12/02/2019 23:54:00 Peter Wells
a man holding a sign: Spotify CEO Daniel Ek says that while locking certain music exclusively to the app makes no sense, locking down podcast exclusives does. © BloombergSpotify CEO Daniel Ek says that while locking certain music exclusively to the app makes no sense, locking down podcast exclusives does.

Last week Spotify announced it was acquiring podcast production house Gimlet Media - home to popular shows Reply All and Science Vs - and recording app Anchor, which we've previously recommended as the easiest way to record and distribute a podcast.

In the short term, not much will change; both Gimlet and Anchor will continue to function as they were, from their own offices. But in the long term, it will be fascinating to see what these acquisitions mean for Spotify specifically, and for the podcast industry more broadly.

With the purchase of Anchor, Spotify seems to be positioning itself as the YouTube of audio; a position Soundcloud once tried to occupy but could never quite grasp. Soundcloud made recording, uploading and hosting audio to its servers easy, but its free hosting tier never held enough data for podcasts to take advantage of. Which felt odd when YouTube hosted much larger video files for free.

To make matters worse, finding the mp3 to use outside of Soundcloud's own interface was an excruciating experience. In Anchor, there are big, shiny buttons to add your show to Apple Podcasts, Google Podcasts and Spotify, that you press once and never have to think about again.

The acquisition of Gimlet is a lot more interesting. Spotify reportedly paid $US230 million ($324 million) for Gimlet, or roughly two-thirds of the entire revenue of podcasts in 2018; that's for all 600,000 podcasts, not just the 15 or so titles Gimlet produces.

Recode Media's Peter Kafka broke the news of Gimlet's sale, and to repay the favour Gimlet's co-founders Alex Blumberg and Matt Lieber joined Kafka on his podcast to discuss the deal. Blumberg and Lieber said for them, the sale was all about getting their shows in front of the largest audience as possible, and they talked about the tremendous growth they've seen with Spotify. Spotify introduced podcasts to its platform in 2016, by invitation only, and quickly gained 7 per cent of the overall market. Last year the streaming service opened up to all podcasts, and now 20 per cent of shows are listened to through its app. Says Lieber: "They're our second-biggest partner and our fastest-growing partner, and we believe they're the future."

Blumberg used the interview to downplay concerns that Gimlet's media would be made exclusively for Spotify. "The existing shows will not be made exclusive to Spotify. You'll continue to get them where you get them now," he said.

"And yeah, going forward I think it's going to be a mix. This is a new world, and we're trying to figure out how it works. And so it'll be a mix of exclusive things that we make exclusively for Spotify, like we're doing right now with Mogul or things that are windowed or things that are a mix of the two. I think there's gonna be a lot of experimentation."

The purchase of Gimlet and Anchor will make Spotify the first true competitor to Apple in the podcast space. © Getty ImagesThe purchase of Gimlet and Anchor will make Spotify the first true competitor to Apple in the podcast space. Announcing the purchase of Gimlet, Spotify's CEO Daniel Ek contrasted the business of music streaming - where exclusives made little sense - to the potential of exclusives in podcasts.

"I think these are two very, very different businesses. We've spoken in the past about the music industry not being a space where exclusivity makes sense for a number of different reasons, but including ... that radio can put any piece of music up. So exclusives won't have the same effect, as you won't be able to keep it exclusive," Ek said.

"And the second thing obviously is the artists and the label have the incentive to push the content out in as many places as possible, because so much of an artist's revenue derives from touring. I think in audio and certainly in podcast, the dynamics is very, very different. And what we're doing here and what we're excited about is really building the market, it's at a very, very different stage of maturity. So we're investing in that and we think we can be one of the tent-pole players in that space."

By toying with the idea of podcast exclusives, Spotify is signalling it will approach podcasting very differently to the current market leader, Apple Podcasts.

Apple has long been thought of as a good shepherd to podcast industry. The tech giant introduced podcasts to a mainstream audience over a decade ago, and has rarely interfered with the open nature of the medium since.

Despite controlling the world's most important directory - one that powers its own app as well as most independent apps - Apple has never imposed proprietary features on podcasters as a price of entry into iTunes. Apple has never made exclusive podcast deals, for instance making a season of Serial or How Stuff Works available on iTunes only.

This hands-off approach means a podcast in 2019 was not that different, technically, to a podcast of 2005. While the audio may have improved, podcasts are still just mp3s released via RSS; allowing Google, Stitcher, Overcast, Pocket Casts and, of course, Spotify to create competing podcast apps.

Still, it is hard to overstate the power Apple has over podcasting. Apple can make or break a show by simply featuring it in Apple Podcasts, thanks to the massive market share the player holds. There's a reason your favourite hosts ask you to rate and review the show in Apple Podcasts, "or wherever else you listen". Until now, no other player was worth mentioning by name. After owning the podcast market for over a decade, Apple finally has a true competitor in the space.

13. helmikuuta 2019 1:54:00 Categories: RTBF Sydney Morning Herald sport - cyclisme - tourdefrance

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