More Reaction To The Big Spotify Deal

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The dust is still clearing from the bomb Spotify dropped on the podcasting world this week. We wanted to get more reaction from those that have been parked in this space for many years. We found two of our favorite experts, woke them up from their nap, and peppered them with questions.


John Dennis is the Chief Experience Officer at Podfest Multimedia Expo. Hall-of-famer Dave Jackson is the CEO at The School of Podcasting. Both are on the Podcast Business Journal Editorial Board. Here’s what they both thought of the deal.

PBJ: What are your overall thoughts on the deals?
John Dennis: I’m honestly a little surprised at how high the numbers are, but, such is the case with startup culture I suppose. Everyone was surprised to see Facebook acquire a messaging platform (Whatsapp) for $19 Billion, but we’re starting to see why as they begin to heavily monetize the platform. They’re a social media platform that wanted more user numbers under their umbrella and doubled down on messaging. Like Facebook on the digital social front, we’ve seen Spotify storm the audio streaming industry with huge success. They’ve got the numbers (in both users and data) and after embarking into podcasting, they saw an uptick in time spent on the platform. My guess is that it took them by surprise (Rob, you have the data on average percentage of episodes listened to – imagine being Spotify and vying for every single second you can get). Spotify wants to dominate in the space so they can attract more ad dollars. That’s their big play. Like Facebook, INVENTORY (# of users x time spent on platform daily) is always the challenge. It’s worth billions. This is a play to ultimately raise their inventory for ads and better tailor those ads to users so they improve on user experience.
Dave Jackson: In some ways, Spotify (along with Google Play Music) is one of the few services that make a copy of your files on their server. This makes updating any files with a mistake a hassle. This (for me) has also put Spotify in a “doesn’t 100% get podcasting” light (so close, but not 100%). With the purchase of Anchor (a company that has spent tons of cash and made zero profit), this again makes me scratch my head. I will cover my beef with Anchor and the extra work they cause in a future article. For me, it’s like the New England Patriots (a great platform) hiring Josh Gordon ( a super talented receiver with LOTS of personal (drug) issues) Josh didn’t make it to the end of the season. So I’m not sure how buying a platform that has been leaking money at a rapid rate is going to add to the bottom line of Spotify. For me, I don’t get it.

PBJ: Does this mean anything for the industry?

John Dennis

John Dennis: I think it means less for the industry than it does for Spotify themselves. For the industry, I think it means an uptick in attention and media coverage, albeit temporary most likely. It could spark some investment interest with other companies and groups, too. Beyond that, more people may become exposed to podcasts as a result of Spotify further promoting them. That, and — before anyone creates a podcast, they must first listen to one.
Dave Jackson: Apparently, Spotify has deep pockets that will hopefully continue to be deep. The day I turn on the TV and see a commercial teaching someone how to listen to podcasts is the day the industry moves ahead at a much quicker pace. If Gimlet brings people to Spotify and Spotify promotes podcasts, in the end, podcasting gets more exposure. Ann Murray got lots of mileage back in the 1970’s because she was in a photo with the “Hollywood Vampires” (Alice Cooper, John Lennon, and Mickey Dolenz see https://youtu.be/kGyPK2iWV3k ) so maybe the Independent podcaster can play the part of Ann Murray.

PBJ: Are you surprised that Anchor was purchased?
John Dennis: Yes. I wasn’t counting Anchor out, but I think they still have a lot to prove about their platform… mostly having to do with podfade and the longevity of their creator base. That’s their lifeblood.
Dave Jackson: Yes. Their lack of business model will require a lot of work to make them an asset to any company. They were approaching their three year anniversary and that is where every other free podcast hosting service typically pulls the plug after they realize free is not a business model and they run out of VC money. I have a test show on their platform. The only sponsor ( which is how Anchor is going to make money) is Anchor (so the thing that was supposed to bring in money, actually is yet another way they are spending money).

PBJ: What will the Anchor deal mean for podcasters who are on Anchor?
John Dennis: This one is a toss up – I don’t think anyone can be certain. Big companies like┬ácontrol (usually for good reason as it pertains to self-interest), so I don’t see them changing terms or anything like that. I’m sure the creators will see better incentives and rev share — this was a big pain point for Anchor, and Spotify has the revenue AND the advertisers.

Dave Jackson

Dave Jackson: Unless this is changed, they still won’t have access to their stats in PodcastsConnect.Apple.com or in the Stitcher partner portal. Every day I have to explain to people who are leaving anchor the extra steps they have to take to get complete control of all of their content AND DATA. When they finally understand what they did, you see it in their face that they had no idea that anchor blocked them from this data.

PBJ: Who’s next to be sold?
John Dennis: I’d say look for companies who have tons of users or listeners in their pockets (obviously). I wouldn’t be surprised to see other networks get offers.
Dave Jackson: I guess we will see. Soundcloud?

John Dennis can be reached at [email protected]
Dave Jackson can be reached at [email protected]

1 COMMENT

  1. Not sure Anchor is such a mystery. It’s a tech acquisition; the balance sheet might be irrelevant. Anchor could be Spotify’s user-submit mechanism for podcasters. Spotify developed its own user-submit funnel for musicians to place their music directly into Spotify, bypassing digital agencies like Distrokid and CD Baby. Providing an easy on-ramp in music gives Spotify more user-created content with a royalty structure that doesn’t go through labels. Spotify might want user-uploaded podcasts for the same general reason — it gives them more inventory to sell without an overarching ownership layer.

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