Spotify's Podcasting Expansion

Is it full stream ahead?

Yesterday’s StreamOn, a 90-minute presentation from Spotify extolled the virtues of its streaming audio world. Alongside digs at radio, music stores and the digital advertising market, Spotify positioned their platform as the perfect place for artists, podcasters, advertisers and listeners. Good news for all, except perhaps other middlemen.

The event covered a lot of ground - the expansion of its service to 80 more countries and 36 languages, HD audio, new advertising and promotional opportunities for music companies, more products for advertisers and a range of podcast initiatives, including a new Spotify Original podcast series with Barack Obama and Bruce Springsteen. I’ll be disappointed if neither does a Squarespace read.

On the podcasting front there’s a few interesting things for creators to think about.

What is good news is the expansion of Sound Up, its initiative to help under-represented podcasters get noticed, get training and get exposure. Any opportunity for helping people with unique voices is definitely a good thing.

Looking at their other announcements, there’s definitely some firmer statements on things I’ve been guessing about.

Streaming Ad Insertion is their big advertising push. The difference they’re taking to the market, is that shows delivered on Spotify are streamed rather than downloaded, meaning that you’re getting actual listening measured vs a download number, when all you know is that a file’s been downloaded. This, allied with the fact all Spotify listeners are ‘logged in’, means advertisers can be more targeted with their campaigns and they know the ads have been heard. This is very similar to the Facebook advertising model. If you want your ad to go to 21 year-old women in New York who like Cardi B and listen to keep fit playlists, then you can target an ad that way. They’re also expanding their self-service advertising system to podcasts as well, so anyone can run ads across their shows.

Up to now this has mainly been during Spotify Originals or shows from its own studios Gimlet and Parcast, but it plans to open up the inventory by including shows hosted and monetised by Megaphone, that it acquired last year under the Spotify Audience Network banner.

Megaphone is an Acast/DAX-like service, predominantly for US shows. In reality this change doesn’t mean much of an alteration for Megaphone partners. I guess they’ll just insert ad markers as normal, and on Spotify they may get an SAI ad, and one sold the traditional way for downloaders. The key question will be whether the level of interest and use of SAI by ad agencies means that the CPM rate of those listens are higher, making an appreciable difference to the money a show will make.

Of course, for all ad sales point, having an edge or a difference is necessary when you’re competing in a relatively commoditised market. For Spotify’s competitors, it will be relatively easy for them to identify streamed inventory vs downloads, so these too could could be addressed differently for their clients as well. The harder thing is access to ‘first party’ data to allow the very specific targeting, but there’s way to get that, or infer that - we’ll see whether it’s enough for the big agencies.

The ability to create very targeted groups to reach via social etc seems like magic, but for many advertisers what they actually want is a broad audience. Where more niche targeting can be useful is in the ad creative that you might use. There are lots of services that take the Facebook ad response data and re-designs and test hundreds of thousands of different creatives. That’s obviously much harder to do with an audio read, unless you’re using a service like AMillionAds.

If the SAI CPMs are much higher from podcasters, it will likely encourage them to send more of their audience to Spotify for listening, potentially a great opportunity for lots of free ads for the Spotify service.

Like many tech platforms, driving use and providing ways to move consumers across is a key objective. There’s a few other things announced that will also help with that aim.

Right now the podcasters who want to experiment with Spotify’s Music and Speech shows have to be hosted on the Spotify-owned Anchor platform and the content they make can still only be listened to on Spotify. It’ll be the same for the new, additional Anchor-created, Spotify-delivered features - Q&As and Polls.

Whilst the interactivity is useful, for most popular shows they’ll likely be ignored, because by talking about it, you’re disenfranchising a section of the audience, say your Apple Podcast listeners, who can’t access the feature. It also somewhat continues the balkanisation of podcasting, where different podcast platforms have different features and as a creator you’re stuck in the middle.

It would be much more interesting if they served these new features through the RSS feed, challenging other apps to include it in their services too. This would properly drive the take-up of the feature, and Spotify would still benefit if they were the people executing it the best.

A new feature of definite interest to some types of podcasters, is the opening up of the video elements of Spotify podcasts. At the moment if you listen to a Joe Rogan episode and tap the play bar you get the video feed of the episode. It’s nice functionality. It doesn’t force the video on you, but you’ve got it there if you want to.

Signalling an MP4 video feed would be easy to do in RSS, but I imagine it’s another feature that will likely be tied to Anchor-only shows. I think that’s definitely something that would attract creators to move their shows to Anchor.

The other feature that got a very short mention, but could be pretty revolutionary, was talk of paid subscriptions and other pay-to-download features. There’s very few details, just a wait-list to sign up to, which makes it sound more like a response to rumours about Apple’s podcast subscription plans.

I imagine that these two systems are likely to be pretty bespoke for both Apple and Spotify, no doubt making podcasters have to work pretty hard, and most likely, keeping it confusing for listeners. I imagine we’ll be hearing lots of “if you want to get access to our special episode, it’s available for Apple listeners as part of Apple Podcasts+, meanwhile Spotify listeners can pay £2, you can also download it if you’re a supporter from Patreon, but we’d rather you got it from our website, where we get more money”.

With all of this, one thing is for sure, and that’s Spotify is doing the most to drive podcasting forward. From content deals, to hosting, to ad insertion and marketing they are pitching themselves as the best and most interesting place for creators to get involved with - and that will drive listening on the Spotify app. If they’re successful, they absolutely have the chance to corner the podcasting market.

So far, podcasting is the story of monopolies. It’s open access nature - the purity of the everyone-can-access RSS feed - created a medium where distribution was easy for any show, and any app could have access to all the content pretty quickly. The lack of leadership meant it took a while to grow.

The first to notice the opportunity was Apple, who saw the benefit to their business of incorporating this public catalogue. It resulted in them being the de-facto podcast gatekeeper (“I’m number one in the iTunes chart!).

Spotify are taking this to the next stage by building proprietary tech around the open feed and providing the default monetisation platform. Will this benevolently tangle up shows and crown them king of the podcast castle? Or will we still see Amazon, Google and perhaps a resurgent Apple re-engage with this space? Only time will tell. But I’d say that there isn’t much time for others to catch-up.

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