Spotify + GimletAnchor Quick Take + Worldwide Meetup Details!

Summary Notes


In this episode, hosts David and Ben celebrate Acquired's milestone of surpassing a million downloads and announce a worldwide virtual meetup for listeners to engage in a Q&A session via Zoom. They also delve into Spotify's strategic acquisitions of Gimlet Media and Anchor, analyzing the implications for the podcasting industry. David and Ben discuss how Spotify's business model, which relies on subscription revenue, differs from other platforms and could potentially transform content monetization. They speculate on the potential for exclusive content to attract subscribers and consider how Anchor's data on emerging podcasts could be a valuable asset for Spotify. Additionally, they touch upon the broader impact of these acquisitions on podcast creators and listeners, suggesting that we might be entering a golden age for the medium, akin to the renaissance in television. With podcasting becoming more mainstream, David and Ben also introduce Kimberlite, a platform designed to empower podcasters with direct monetization opportunities, hinting at a future where content creators can sustainably engage with their audience.

Summary Notes

Worldwide Virtual Meetup Announcement

  • Acquired podcast celebrates a million downloads with a virtual meetup.
  • The meetup is scheduled for Thursday, February 21, at 05:30 p.m. Pacific time on Zoom.
  • The structure of the meetup is a Q&A session with the audience.
  • Audience members can submit and upvote questions using a Slack bot set up by David, accessible through the "meetups" channel on Slack.

"So this Thursday, February 21, we will all be getting together on the Internet to celebrate acquired passing the million download milestone."

This quote announces the occasion for the virtual meetup, celebrating the podcast's download milestone.

"The zoom link is available in the show notes. And if you want to send us a question or upvote somebody else's question, which is very fancy, you can ask it in the slack thanks to a very cool slack bot that David has set up."

This quote provides practical details on how listeners can participate in the Q&A session during the virtual meetup.

Spotify's Acquisition of Gimlet and Anchor

  • The podcast discusses Spotify's recent acquisitions in the podcasting space.
  • Spotify acquired Gimlet Media for around $230 million and Anchor for just over $100 million.
  • Spotify plans to spend several hundred million more on podcast acquisitions in 2019.
  • These acquisitions signify a significant shift in the podcasting industry's investment landscape.

"Spotify not only acquired Gimlet Media for now, I think we, as of today know the numbers. They paid about $230,000,000 for Gimlet, I believe, maybe slightly less, and also acquired anchor for just over $100 million, and then pledged that they were going to spend several hundred million more this year in 2019 in podcast acquisitions."

This quote details the financial aspects of Spotify's acquisitions and their commitment to further investment in the podcasting space.

Business Model and Content Strategy

  • Spotify's business model differs from other podcasting platforms as it charges consumers a monthly subscription fee.
  • The acquisition of Gimlet and Anchor could lead to more exclusive content, potentially driving more subscribers to Spotify.
  • Gimlet's acquisition is not for its current content but for its future potential to create exclusive shows.
  • Anchor's acquisition provides valuable data on new podcast trends and could be a strategic move to increase content supply.

"Spotify's business model is they get consumers to pay them $10 a month. Obviously, that's primarily for music, but also podcasts."

This quote explains Spotify's subscription-based business model and how it could benefit from additional podcast content.

"Spotify bought Gimlet not for the content that they have today, but their ability to create exclusive content in the future."

This quote emphasizes the strategic importance of Gimlet's content creation capabilities for Spotify's future content strategy.

Competitive Advantage and Market Dynamics

  • Spotify's fixed cost for content can be spread across a broad customer base, providing a competitive advantage.
  • Gimlet is viewed as a best-in-class content producer, which could be a differentiating factor for Spotify against competitors like Apple Music.
  • The podcast market includes various segments such as content creation, recording, production, hosting, distribution, promotion, discovery, and consumption.
  • The significant value in the podcast market lies in content, paid discovery, and potentially hosting.

"The breadth of your customer base that you're amortizing those fixed costs over matters a lot is your competitive advantage."

This quote highlights the importance of customer base size in leveraging fixed costs for competitive advantage.

Implications of Anchor's Acquisition

  • Anchor's role in the podcasting market was initially underestimated due to the perceived lack of profitability in recording.
  • The acquisition of Anchor by Spotify is seen as a strategic move to create more supply and facilitate content creation.
  • Anchor's technology is not necessarily unique, but its success in making podcasting accessible is valuable.

"Spotify bought anchor not for any of the technology itself, not that it's necessarily specifically hard or highly differentiated tech, but what the tech had managed to accomplish."

This quote suggests that the value of Anchor's acquisition lies in its ability to foster a large number of new podcasts, rather than the technology itself.

Anchor's Role in Podcast Success

  • Anchor provides a significant insight into podcast data, beneficial for licensing and show creation.
  • Originally a player, Anchor pivoted to content creation.
  • Anchor's acquisition by Spotify has increased its value.

"Which gives them a tremendous look at the data of what podcasts will be successful as they start to do more and more licensing and show creation."

The quote emphasizes the advantage Anchor has in predicting successful podcasts due to its access to extensive data, which is particularly useful for licensing and creating new shows.

Anchor's Evolution and Spotify's Benefit

  • Anchor began as an audio social network and has evolved under Spotify's ownership.
  • Spotify and Anchor's partnership exemplifies the synergy where the combined value exceeds their individual contributions.

"This is very different as part of Spotify than it was by itself and... Probably much more valuable."

This quote suggests that Anchor's integration into Spotify has transformed its role and potential, making it more valuable than it would be as a standalone entity.

Podcast Production Quality and Hosting

  • Acquired podcast prioritizes high-quality audio production and control over production aspects.
  • Anchor could be used for hosting high-quality recordings, taking advantage of features like dynamic ad insertion.
  • Hosting services are considered a commodity in the podcast industry.

"We would never use anchor at acquired because we care so much about highest quality audio possible and controlling every aspect of production."

The quote explains that Acquired podcast values audio quality and production control, which is why they would not typically use Anchor for recording, though hosting remains a possibility.

The Importance of Analytics in Podcasting

  • Hosting platforms like Libson provide the foundation for analytics in podcasting.
  • Analytics inform content acquisition and production decisions, similar to Netflix's model.
  • Current analytics are limited and often require creators to aggregate data manually.

"Now, what's interesting about the hosting part of the stack is that's the substrate for analytics."

This quote highlights the role of hosting services as a basis for gathering analytics, which are crucial for understanding audience engagement and informing content decisions.

The Limitations of Podcast Analytics

  • The majority of analytics tools lack access to client-side data.
  • Podcast creators often have to perform data aggregation manually, which is a cumbersome process.

"The vast majority of them don't have access to client side data. So you only get the information that the server sees, which is pretty small."

The quote points out a significant limitation in podcast analytics, where the lack of client-side data results in an incomplete picture of listener behavior.

Spotify's Growth and Market Share

  • Spotify has been increasing its listener share in the podcast market.
  • Acquisitions and the creation of differentiated content can help Spotify compete with Apple's dominance.
  • The potential for Spotify to produce hit content like Netflix's Birdbox could drive subscriptions.

"They've been growing and growing in share. Now, Apple has historically been the elephant in the space with 50, 60. It used to be like 80% of listens happening in the Apple podcast app."

The quote discusses Spotify's growth in the podcast listener market and its potential to challenge Apple's longstanding dominance.

Spotify's Unique Business Model in Podcasting

  • Spotify's business model is based on content acquisition and subscription-driven revenue.
  • Apple lacks the incentive to invest heavily in podcast content as it does not directly monetize it.
  • The podcasting industry is rapidly evolving, with potential new business models emerging.

"Spotify is the only player that now has not only a very different business model from anyone else in the podcasting space, but I would argue really the only viable business model."

The quote asserts that Spotify's subscription and content-focused business model is currently the most viable in the podcasting space, setting it apart from competitors like Apple.

The Future of Podcasting and Stakeholder Interests

  • The future of podcasting depends on the interests of creators, listeners, and platforms.
  • Creators and listeners are the primary stakeholders, with platforms facilitating their interaction.
  • Podcasters should consider distributing on Spotify for additional audience reach.

"The question what's next and what will happen? Can be broken down into who are the stakeholders and what do they all want?"

The quote suggests that understanding the future of podcasting requires analyzing the desires and motivations of the various stakeholders involved, particularly creators, listeners, and platforms.

Distribution on Spotify and Potential Algorithmic Changes

  • Incremental audience growth is beneficial for podcasters.
  • Concerns arise if Spotify shifts to an algorithmic feed, potentially controlling listener access.

"The answer is assuredly yes, unless and until Spotify makes a product change to go to an algorithmic feed instead of a subscription model."

This quote recommends that podcasters distribute on Spotify to gain audience but cautions against potential future changes where Spotify could control listener access through an algorithmic feed.

Platform Intermediation Concerns

  • Podcast creators express concern over platforms potentially mediating their relationship with their audience.
  • The fear is that platforms like Spotify might prioritize their content over creators', limiting reach to existing subscribers.
  • Creators are questioning whether it's beneficial to be on platforms that might intermediate their content.

"If Spotify does that, I think then there's a question, should you be on it?"

This quote highlights the creators' dilemma about staying on a platform that may interfere with their direct connection to their audience.

Spotify's Business Model

  • Spotify operates differently from platforms like YouTube, focusing on subscription revenue over ad revenue.
  • The service is designed to provide content that subscribers have shown an interest in, without the need to maximize ad impressions.
  • Spotify's goal is to satisfy customers with the content they've subscribed to, rather than to curate a feed of recommended content.

"Spotify just wants you to pay them $10 a month."

This quote explains Spotify's business model, which prioritizes monthly subscription fees over advertising revenue, influencing how they present content to users.

The Potential Shift in Spotify's Content Strategy

  • There's speculation about whether Spotify will shift from a straightforward subscription model to a more curated content feed.
  • The concern is that Spotify could start behaving like Facebook, which uses its newsfeed to maximize ad views and user engagement.
  • Spotify's business model does not currently rely on ads, which may prevent them from adopting a Facebook-like content strategy.

"That is the scenario where."

This incomplete quote suggests a hypothetical situation where Spotify might change its content delivery approach, which could impact creators and subscribers.

The Role of Algorithmic Content Curation

  • Algorithmic curation of audio content has been tried by apps like Swell and 60db, aiming to play content tailored to user preferences.
  • There's a question of whether Spotify's subscribers would prefer algorithmically curated content over directly subscribed content.
  • The effectiveness of algorithmic curation for audio content, as opposed to visual content, is still uncertain.

"The question is, will Spotify's $10 a month customers be more delighted with a primary experience around here's some stuff you like than they will with. Here's the latest episode of a thing that you have directly created a relationship with and subscribed to, perhaps."

This quote raises the question of whether Spotify subscribers would prefer a personalized curation of content over their chosen subscriptions.

Netflix's Content Strategy vs. Spotify

  • Netflix has not opened its platform to freely available content, unlike Spotify.
  • The cost of bandwidth and hosting for video content is significant, which may be why Netflix has not adopted this strategy.
  • Spotify may have included freely available podcast content as a way to introduce users to spoken audio content on their platform.

"Why hasn't Netflix decided that any freely available content on other platforms should also be available on ours?"

This quote compares Netflix's strategy with Spotify's, highlighting the differences in their approach to content availability.

Podcast Monetization Evolution

  • Podcasting is evolving with new business models, including direct monetization through subscriber-only content.
  • The LP show and the limited partner program are examples of successful direct monetization strategies.
  • The podcast industry is moving towards sustainable business models where content creators can directly monetize their most engaged listeners.

"There's a business model now to be able to directly monetize some percent of your audience in a super aligned way with their interests."

This quote emphasizes the emergence of new business models in podcasting that allow creators to monetize their content directly and align with their audience's interests.

Kimberlite and Creator Independence

  • Kimberlite is a platform that supports the limited partner program, enabling podcasters to monetize their content.
  • The platform allows for different monetization strategies, offering flexibility to content creators.
  • The shift towards platforms like Kimberlite represents a broader movement towards independence for content creators.

"We're moving to an era, know independent creators can have this relationship with audience and have sort of sustainable business models where content can be directly funded by folks that it is most resonant with."

This quote discusses the significance of platforms like Kimberlite in empowering content creators to have direct, sustainable relationships with their audience.

The Future of Acquired and Content Flexibility

  • The creators of Acquired reserve the right to evolve their content offerings, including potentially expanding beyond their current focus.
  • There's a commitment to keeping the core Acquired show free, but there's openness to experimenting with content formats.
  • Changes in content strategy reflect the dynamic nature of podcasting and the creators' desire to explore new topics and formats.

"Don't make promises, David. We don't know yet."

This quote captures the creators' openness to change and the fluidity of their content strategy, acknowledging that future developments may lead to new content offerings.

Ecosystem Considerations

  • The podcast ecosystem is complex, with different stakeholders including creators, platforms, and listeners.
  • It's important to consider the impact of business model changes on the entire ecosystem.
  • The discussion around ecosystem dynamics is brief but acknowledges its importance.

"I don't think we need to spend as much time on the rest of the ecosystem, but I do want to make sure we round."

This incomplete quote suggests that while the focus has been on the creators' perspective, there is an acknowledgment of the broader podcast ecosystem's relevance.

Podcast Accessibility and Listener Experience on Spotify

  • Spotify's integration of podcasts provides a gateway for casual listeners to explore more podcasts.
  • The platform's convenience attracts users who may not be dedicated podcast fans.
  • There is a debate about the benefits of an open ecosystem versus a controlled, optimized experience by a single company.
  • Listeners generally prefer easy access to content they enjoy.

"So the audience side, I think it's a win for listeners who want to, particularly listeners who aren't enormous podcast fans and aren't going to have a dedicated app for it, but have one or two that they want to listen to or potentially be exposed to podcasting when they otherwise wouldn't have been exposed to it."

This quote emphasizes the advantage Spotify provides to casual podcast listeners who do not use dedicated podcast apps but are interested in exploring the medium.

Evolution of Podcast Business Models

  • There are now at least two core viable business models supporting podcast content creation.
  • The growth of these models is expected to increase the quality of podcast content.
  • This mirrors the renaissance in television due to platforms like Netflix and Amazon Video.

"And there now being at least two and perhaps more, but I think probably two core viable business models in the space to support it, is only going to be great for listeners."

David suggests that the emergence of solid business models in podcasting is beneficial for listeners, as it will likely lead to more high-quality content.

  • Edison Research surveys the state of podcasting annually, revealing significant mainstream listenership.
  • Monthly podcast listenership is almost 80 million, with weekly listenership close to 50 million in the U.S.
  • Weekly podcast listeners spend an average of six and a half hours listening.
  • Podcast growth among Americans is modest at 15% per year, but the number of new podcasts is growing exponentially.
  • Spotify's influence is expected to contribute to a larger growth in podcasting.

"Almost 80 million people listen monthly. Almost 50 million people listen weekly. When people listen to podcasts, they spend an average of like six and a half hours a week listening to podcasts."

Ben shares staggering statistics about podcast listenership, highlighting the medium's mainstream appeal and the significant time investment by weekly listeners.

Marketing and Monetization of Podcasts

  • Previously, there was no incentive for marketing podcasts due to a lack of viable business models.
  • With new business models, podcasts are now being marketed through traditional channels like television and billboards.
  • Platforms like Kimberly enable content creators to see a return on investment (ROI) for their efforts.
  • Confidence in ROI is expected to increase the funds flowing through the podcast ecosystem.

"Listenership in the US podcast listenership has grown all completely organically again, because there haven't been viable business models, there has been no ability or incentive for anyone to spend on advertising and marketing for podcasts."

David points out that the organic growth of podcast listenership is set to change with new business models providing the means and incentive to market podcasts more aggressively.

The Dissect Podcast Case Study

  • The Dissect podcast serves as an example of high-quality, independent content creation.
  • Spotify licensed the Dissect podcast, allowing the creator to produce content full-time while keeping it accessible to all listeners.
  • Spotify's strategy includes subtle marketing to encourage listening on their platform without exclusivity.

"It's a very soft hammer they're brandishing. It's like, oh, it's produced by us, but you can listen anywhere."

Ben describes Spotify's approach to promoting their content as non-aggressive, allowing for broader access while still driving listeners to their platform.

The Future of the Podcast Ecosystem

  • The podcast industry may be entering a golden age similar to the golden age of television.
  • Despite Spotify's growth in listener share, the podcasting space is expected to remain fragmented.
  • The variety of podcasting apps reflects personal preferences, similar to productivity software.
  • Other large companies are anticipated to invest in podcasting following Spotify's lead.

"I do think we'll kind of continue to see a fragmented player experience for a long time."

Ben predicts that the podcasting landscape will remain diverse, with multiple platforms catering to different audience preferences.

Feedback and Community Engagement

  • The speakers express a desire for listener feedback on the format and content of their episodes.
  • They introduce the concept of "quick take" episodes that are shorter and less researched.
  • The speakers invite listeners to engage with them through a virtual meetup and to consider joining their limited partner program for deeper discussions.

"We would especially love to hear your thoughts and feedback and questions on this topic and this format."

David encourages listeners to share their opinions on the podcast's format and topics, emphasizing the importance of community engagement in shaping the show's future.

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