Sharon is CRO at Triton Digital — this interview has been lightly edited for style and readability
Sharon Taylor: Triton Digital is an audio services provider. We do podcast hosting through two CMSs that we own, Omny Studio and Spreaker. We do all advertising, dynamic and programmatic. We do measurement of the industry, and then we have the (live) streaming business still as well. So anything audio you can think about is Triton Digital.
Sam Sethi: You’ve now started to make announcements about moving towards video. So the first one was the support for MP4. And then you did a deal with Spotify. So talk to me about those two and why you went into that video solution.
ST: For those that know me, they know me as a real true audiophile. Omny Studio for years has just been an audio CMS. It’s built for podcasts, it’s built for audio on demand, and that was Triton’s take on the industry as well. We did audio really well and we still do. Obviously, in the last few years, all of us have watched this groundswell towards YouTube and podcast video in general. And in the early days, some of us with our tinfoil hats were like: “it’s a flash in the pan”. It wasn’t a flash. How we thought about video has changed as the market has moved. Our job is just to be a hosting and distribution and monetization platform for audio content. And if audio content is becoming video as well, then we need to do that.
Halfway through last year, we decided to build video into the Omny Studio CMS so that publishers could upload an MP4. And Apple at the time was really the only one that allowed MP4 in RSS. It’s not new technology, it was Apple’s best - or worst - kept secret. We built that as a beta product because for me, it’s very, very important that a publisher stays in the driver’s seat of their audience and then monetization. I think we’ve made mis-steps as an industry over the years of giving away the keys to that kingdom. And for us, it’s really important that how you monetize and the ads that you run are delivered from a central point. And so that’s why we did the MP4 RSS to start.
SS: Now, along came Spotify, knocked on the door of Triton and said, Hello, we’re going to do video. What has the relationship been?
ST: My thoughts on Spotify? It is a wall garden. It has been historically. And in order to monetize on Spotify or upload a video, it really meant cutting off your RSS feed. I was speaking to a publisher just this morning who still uploads the video into Spotify. And the access to the video audience is enough of a carrot for them to cut off their advertising because obviously it breaks RSS. No longer can you get dynamically inserted ads, programmatic or direct sold. And so it’s been a hard sell, I think, historically, for publishers to think about that.
It is fascinating that publishers think about YouTube video totally different to audio first apps. Publishers seem to think of YouTube as this whole different platform. It doesn’t matter if my ads appear in it. I’ll just burn them in as video reads and I’ll take the YouTube money. That thinking hasn’t pulled across into Spotify, especially, which are doing the same business model, which is you upload something separately to their system and then you allow them to monetize it if you’re on their platform. But it it really does split apart from audio advertising. And so when they came to us, it’s because they wanted to open the door to a greater amount of content on their system. And so they came to us and Acast and AudioBoom and a couple of others. We now have access to an API that allows publishers on Omny to push a video file out to Spotify.
But, it still does not allow for dynamic ad insertion. And I am very passionate about that. I think Triton’s job is to ensure that the ads that you run appear in as many places as you have an audience for. And so I’m interested to see how that develops over time and how they respond to what Apple has put in the market. Again, hopefully that rising tide lifts all of our podcasting boats.
SS: Apple came out with a bombshell announcement: “We’re going to be doing video HLS.” How have you found as Triton adopting to this new model?
ST: Now that we can talk about it with publishers in the industry, it has been received incredibly well. I feel like, again, that driver’s seat, every publisher wants that. Every publisher wants to access a video audience, but also maintain their revenue and their top and bottom lines. And so the conversations have been incredible in terms of how people are thinking about it. How we are approaching it, I think, is another layer of our video offering. It’s not going to be for everyone. Video is expensive to create, and we should talk a little bit more about the advertising structure that Apple is offering and how the HLS will be delivered. HLS will still be delivered via download and auto downloads will still be enabled. And I think the jury is out on what advertiser appetite for video advertising in a video podcast that’s downloaded will be. I think we’re in a “watch and wait” there along with many publishers. But in terms of HLS and the opportunities that affords podcasting to move into a more streaming-focused world, I think is the biggest upside that we are hoping for.
SS: You as a partner now are going to get first-party data back, because you’re the ones delivering the video as a HLS file. So you’ve got the information now that used to be encapsulated and controlled by Apple.
ST: I do think that is one of the beliefs out there. It’s one of the conversations that we’ve been having, especially with publishers. But what is transmitted back is still largely in control of Apple. And so the reason we built HLS and were building that before the announcement is because, again, we have all these publishers that have got their owned and operated apps. If you could get to 10% of listening and prove that like an ad was listened to, is that a big enough of a sample to stop the industry commentators from saying that podcast ads aren’t listened to, even though it’s been a decade and ads are listened-to online. Advertisers wouldn’t come back if it wasn’t working. And I think we are very unique as an industry. No one in the out-of-home industry talks about, oh, well, are the eyes actually on the billboard? We know that advertising as a beast works and there are some assumptions built in. So with HLS and obviously it being streaming, the protocol allows for that, but only if the player sends things back. So, no, we don’t get to see any first-party data. I think that’s also a nice thing about podcasting, that it is a less privacy-invasive version of other advertising that’s out there. As the industry moves, and I think Apple has shown they’re quite good at listening to industry feedback,my hope is that advertisers and publishers say, hey, we would love some extra data back. And in a way that kind of helps us control the release of that data and the narrative around it to the advertising industry, as opposed to it just being one day, it all just moves to streaming. Because that’s going to be hard to get our arms around and talk about coherently, I think, to advertisers. And so this is a nice first step into that world, I hope.
SS: So Spotify must be sitting there going, hang on a minute. Apple has gone to these partners and they’ve said you host it, you pay the cost of hosting and delivery. And if there’s any naughtiness in the video, you’re liable, but you pay us a little transaction for every ad. Spotify must be saying that’s a much better model than we’ve got right now, where we’re giving creators a percentage of revenue.
ST: I don’t know what Spotify would be thinking at the moment. I would imagine that the rev share is probably greater than a CPM that they could charge. I think YouTube, Spotify, and Apple have been watching the industry and making adjustments. You know, there’s a reason that Spotify announced that this API would be open to more platforms. And so yes, I think that they will adjust because that’s what they’ve done in the past, all three of these platforms, how they adjust and how they position themselves uniquely in market compared to YouTube and Apple, while they’re all essentially fighting over audience, and we are just hoping to catch some benefits as an industry on the way through. I don’t know. If I was at Spotify, I would be thinking about a different model for sure.
SS: What do you think will be the uptake then of people now saying they want to put their ads into video on Apple?
ST: I think that, especially on day one, the opportunity of putting ads into a video podcast on Apple exists. Whether that’s 1%, 10% or more, I think in the initial phase, those numbers feel right to me. I think the jury is out on how existing advertisers will respond to what Apple is offering.
There’s a video advertiser that exists right now in the industry, like writ large, in advertising. And they are used to getting very specific video metrics back. They are used to getting average view duration and all the things that YouTube give. I don’t know how they’re going to respond to this new offering, which is a primarily audio first audience, listening to audio ads or getting video ads in their video show, but as a download and as an impression.
That market size could be substantial. And it’s obviously why we have jumped at this opportunity because it is like the next meaningful revenue move. Will existing advertisers who already understand how podcast downloads work be the first ones to come in? I feel like the first step will be transmitting maybe a logo or you could do product placement for the advertiser now in the show if you have a sponsorship. There are other ways to drive a CPM higher, I think, and to show that there is a new audience on Apple and maybe the revenue growth in general, if the CPM stays flat is what makes up the difference. So, I hope so, I think so. I don’t know what that number is. And they haven’t launched yet. Ask me in two months and I’ll tell you what I can.