If Netflix and the rest of the video-on-demand platforms are the new television, the podcast is the new radio. Whether they are colloquia between friends or super-productions of the big radio stations, this communication medium perfectly combines the avant-garde of the Internet with the organic, spontaneous and human touch that is so longed for in it.
It started out like all the good things on the web: promoted by fans without great profit expectations, and freely disseminated. And it has remained that way until very recently. The producer hosts the podcast, and the listener can access it through their preferred application. Apple has always been the leader of this open ecosystem by offering an application pre-installed on its iPhone for listening. Until Spotify set its eyes on this juicy emerging market.
The Swedish multinational continues to expand its podcast listener base in the United States while the growth of its rival, Apple, stagnates. According to Emarketer, Spotify will have 28.2 million monthly listeners compared to 28 million for Apple. And the trend is that this tiny, for now, difference will increase over the next few months.
It is not surprising. Apple has been more than a decade without betting firmly on a format that did not stop growing. Small tweaks to the application and service have been insufficient, and its rival, whose business is exclusively audio, has seized this opportunity. In Cupertino they had bigger headaches and projects aimed at much more profitable markets. However, the growing success of Spotify is not only bad news for Apple's interests, it is also bad for listeners . Because you don't want to foster the podcast ecosystem; he wants to annihilate it and take possession of it. It wants to be to podcasts what YouTube is to videos on the Internet.
Apple's parsimony
During the last decade, Apple Podcast has not substantially improved or added important new features. The only reason for its dominance is the absence of a rival to its height. The company allowed the industry to grow by maintaining a certain distance between creators and listeners, allowing the development of a very diverse ecosystem of applications, shows and advertising market without a clear hierarchy of distribution. It could well have taken advantage of this undisputed dominance to have introduced better tools for listeners and profitability for creators. However, Apple's strategy has never been to promote markets, but to enter when they are mature and profitable in the best possible way, taking advantage of its ecosystem and large user base.
They are maneuvers that come as a response to the multiple initiatives of its maximum rival
His interest has grown, and this year he announced the arrival of 'premium' subscriptions to his service. Listeners will be able to enjoy extra content in exchange for a monthly payment as if it were a payment within the App Store. He also published 'Hooked', his first original production podcast based on a story based on a true story about a bank robber.
They are maneuvers that come as a response to the multiple initiatives of his greatest rival. This intends, based on a checkbook, to open a new avenue of income beyond the streaming of songs.
The integrated solution of Spotify
Spotify was born with the aim of providing its users with any song on demand. And it has achieved this by revitalizing the music industry, which is experiencing its best moment since the boom of the compact disc (CD). Having already consolidated its dominant position in the most important markets, the Swedish multinational is looking for new opportunities to increase its revenues beyond the acquisition of paying subscribers. And the most promising are the podcasts in which advertising can be inserted.
It already has 3.2 million podcasts hosted, and it is estimated that 25% of its users have interacted even once with one of them. That is, more than 85 million users.
Its strategy is clear and aggressive: not only does it integrate its podcast player into the application, but Spotify has been enclosing within its service the most popular shows of the moment such as the comic Joe Reagan through a $ 100 million contract.
Joe Reagan interviewing Elon Musk on his popular podcast followed by millions of people These agreements should not be taken as a direct financial investment, but rather a way of making listeners understand that Spotify is the home of podcasts. And even though it has announced premium subscriptions like Apple, its main strategy is advertising. It started with the acquisition of Ringer, Gimlet and Parcast, three major production studios, and the purchase of the two most popular distribution platforms: Anchor and Megaphone.
Spotify has gained control of a large part of the distribution chain , giving creators the opportunity to introduce self-generated ads to make the show profitable. Something similar to what YouTube does in video, and what made it the only possible place where a 10-minute video can generate income on the Internet.
«We see in the audio a great opportunity. We believe there is room for everyone given the scale this medium has achieved, “said Dawn Ostroff, Spotify's chief content officer. “The other companies see audio as a parallel business, but for us it is the only business.”
The death of the podcast as we knew it
Photo by C DX on Unsplash While Silicon Valley bigwigs and deluded people who aspire to become millionaires without contributing anything relevant to society fill their mouths talking about the wonder of the decentralization of the web3, what we see every day are multinationals more and more large centralized everything that circulates on the Internet. The podcast was one of the last amateur strongholds , free, diverse and with decentralized distribution. Spotify is doing everything it can to prevent it.
The listener does not find out, but the fans, those who have been listening to the podcast for a decade, do; and they are upset. Now their ecosystem is cracking because they no longer decide which podcast to listen to and in which application to do it because many of them, the most famous, are already exclusive to Spotify.
The new paradigm assumes that podcasts are on Spotify
For new consumers it will not be a hassle. They assume that the podcasts are on Spotify, and there they will go to listen to them like a teenager goes to YouTube without even considering why videos of more than a minute in length are only relevant there. Either you publish your video on YouTube or it doesn't exist.
Live video already belongs to Twitch; short videos to TikTok and Instagram; the information and the debate in real time to Twitter … It only remained to centralize the distribution of podcasts, and, if Apple does not fight back in time, Spotify is going to take over them .
It is irremediable. Spotify will simplify the process of distribution and capture of income each time through its advertising insertion tools. This makes it easier and faster for content creators to earn income but, on the other hand, that is the premise that was sold to the media that ended up selling advertising for a few measly pennies.
