Daniel Ek from Spotify outlined a new company manifesto entitled Audio First to explain the next step in its evolution. Now online video ads are falling and people want to spend less time on their devices, audio becomes an attractive proposition. "This opportunity starts with the next phase of growth in audio – podcasting."
Between Ek & # 39; s words, Spotify's two new purchases and the pursuit of podcast exclusivity and it is clear that the company wants to own podcasting. And if this succeeds, it can control the process from the moment a show starts until the moment it becomes a blockbuster. Spotify could change a platform to become a talent scout, studio and channel in one.
Gimlet Media is an "award winning narrative podcast company" that was founded in 2014 and attracts big names such as Catherine Keener, Alia Shawkat and Kristen Wiig to his platform. It worked more like a broadcaster than a podcast studio, it intended to become the "HBO of audio" and even announced seasonal programming for its shows. And it is also in the spotlight, after the Homecoming show has been adapted in an Amazon Prime series.
Meanwhile, Anchor is a one-stop podcast app that allows everyone to create their own show and automate production, distribution and hosting. It is designed for everyone to use and offers basic analysis and the ability to generate revenue with shows by acting as an advertising broker. What's more, Anchor offers Patreon-like "membership" that allows fans to financially support their favorite shows.
Since the majority of podcasts are just people who talk, they are a great investment compared to an album, for example. They are also cheaper to license than the costs a music label can demand, and can build an audience that is just as big. Not to mention the fact that podcasts can arrive on a daily, weekly or monthly basis, thus reducing costs further. If you had $ 1 million to spend, would it go on a single 60-minute album, or 20 podcasts that collect 52 episodes every year?
But apart from a few notable exceptions, advertisers were never sure whether podcasting was worth the effort. It was only possible to measure how often an episode was downloaded, not how often it was listened to. In the past few years, that black hole in the information has started to change and with that people have received money.
In 2017, Apple announced that it is adding analytics to its iOS podcast app to show creators some basic information about listening habits. A year later, when the data began to filter, the news was even better than many people could have hoped for. Podcast listeners were the holy grail of advertisers: patient, loyal, and rarely bothered to skip mid-show ads of 30 seconds.
Advertisers are desperately looking for their product for those ears, and are therefore going to spend a lot on podcasts. The IAB believes that ad spending on podcasts will explode explosively, from $ 169 million in 2016 to $ 659 million by 2020. Part of that prize pool will naturally go to any company that owns, manages and broadcasts podcasts.
And Spotify has plenty of room to grow, because according to Anchor, Apple's standard iOS podcast app has no less than 52 percent of the market. Spotify is number two, with only 19 percent, while other apps and platforms make up the rest of the figure. "Users love to have podcasts as part of their Spotify experience," CEO Daniel Ek wrote. And according to him, podcasts are a draw for those people who previously thought that Spotify was not good for them & # 39 ;.
That explains why the company has worked hard to open up its platform to other shows and to pursue exclusivity. This also applies to shows by DJ Semtex, Joe Budden, Jemele Hill and My Dad Wrote a Porno. And you can assume that every hit that Anker-makers build will be encouraged to make their show exclusively for Spotify in the future. That will make Spotify happy, it should make the advertisers of Spotify happy and will keep the public locked.
Owning the analysis, creation and broadcasting process Spotify can also help identify gaps in the market. Just as Netflix can develop movies and TV programs to meet a specific niche, Spotify knows exactly when you're bored. That's a lot of power to have, and it could mean that podcasting is no longer the only medium that goes beyond the blows of big technology.