Volume

Spotify is on a talent binge for exclusive podcasts — so it can defeat Apple

Friday, November 29, 2019 by Robinhood Snacks | Disclosures

This is Nick, this is Jack, and we're your newsletter writers (and pod co-hosts)

Subscribe to everything... That's the decision that music-focused Spotify made back in February when CEO Daniel Ek said he wanted 20% of Spotify listening to be non-music. When you're not Lizzo-ing or mid-binge on Talking Heads, Spotify wants you podding. So the streaming pioneer came up with a 2-part plan:

  1. Blitz acquisitions: Spotify is spending $500M on podcast acquisitions, starting with Gimlet (a production company for podcasts like "Homecoming"), Anchor (a tech platform for creating pods), and Parcast (more pods like "Horoscope Today").
  2. Sign celebs: Spotify just revealed to Hollywood Reporter that it's signed podcast deals with Mark Wahlberg, Jordan Peele, and... the Obamas.

These podcasts aren't for the public good... they're for podcast profits. One lovely thing about podcasts is that Spotify gets the content for free.

  • Music: When your Spotify playlist streams Love on Top, Spotify pays Beyonce for that. The talent gets the royalties.
  • Podcasts: Max Cutler, Founder & MD of Parcast Studios at Spotify told us in our live pod interview that podcasts generate revenue through their ads, not by taking their part of Spotify's revenues like 'Yonce does.
  • The result: A podcast listen is more profitable for Spotify than a music stream.
THE TAKEAWAY

A new streaming war is coming... You can only watch The Crown on Netflix, The Lion King on Disney+, and Hulu ads on Hulu (please kill those ads, Hulu). We asked Max if podcasts would go the same way. The answer is... sort of. Exclusive podcasts are central to Spotify's plan — the Obama pod will probably only exist on Spotify, even if other Spotify pods are still available on Apple (for now). Audio streaming is tempted by the video streaming playbook.

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