(By Richard Davies) Daniel Ek paid podcasting a massive compliment with his money and his mouth. Not only did Spotify agree to pay the princely sum of $340 million for Gimlet and Anchor, its founder and CEO also admitted recently that he’d changed his mind about talk radio and podcasts.
“What I didn’t know when we launched to consumers in 2008 was that audio — not just music — would be the future of Spotify,” Ek wrote in his recent blog.
This is what great leaders do.
They’re constantly open to change, as they listen, learn and ask themselves uncomfortable questions about where the world is now compared to yesterday. Instead of being defensive when dramatic change happens, they adjust and pivot.
In the past few years “we’ve probably dropped some 50 or more podcasts,” ESPN Senior Vice President Traug Keller told podcasting consultant/ thought leader, Steve Goldstein. “We’re constantly trying and experimenting.”
Unlike the three-letter slogans of our political leaders (as in “build that wall” or “green new deal”), anyone in a growing business most understand complexity, as well as what they DON’T know about the future.
Yes, it’s certain that podcasting will change massively, and that our industry is in a state of even greater flux than it was last year. But only the bold and foolish will tell you exactly how the Spotify-Gimlet deal will shake things up.
Among the many questions are the impact on small, but creative independent podcasters, and whether the big brands will move behind pay walls.
One safe bet is that podcast advertising revenues will surge. Here in the U.S. the total was $314 million in 2017— up 86% from the year before, according to the Interactive Advertising Bureau. Ad sales will more than double by next year, the group forecast. But that was before the Spotify deal was announced.
An important reason why Spotify paid so much for Gimlet was its branded podcast division, which landed advertisers that, until now have not sponsored podcasts. “Clients include Ford, Microsoft, Google and HP,” says Richard McManus of Newsroon, who writes about emerging technologies. “If podcasting is to eventually take on the radio industry, it’ll need to entice many more of those large companies to advertise on podcasts. That’s what Spotify is banking on, to make its $230m acquisition truly pay off.
Podcasting will be “the next phase of growth in audio”, wrote Ek confidently in his blog. But how will his company and others address the problems of audience measurement, search and discoverability?
The challenge for today’s podcast leaders, as the industry moves into the major leagues of media and marketing, is to listen carefully and avoid what behavioral economists call “the overconfidence effect”.
Many us have too much subjective confidence in our own judgements.
Richard Davies is a podcast consultant, host and media coach. His firm, DaviesContent designs and produces podcasts. He can be reached by e-mail at email@example.com. Check out other articles he’s written for PBJ HERE.