Spotify may win podcasts defeating Google, Facebook, Apple like how Jio won Indian telecom- Taking big bets in public view while competition do little.
How do Google,FB make money? They monetize our intent, attention and likes via advertisers.
What did Jio do? Took big bet on 4G – changed the playing field rom 2G calls and 3G data to 4G data & VoLTE voice quality that killed off smaller players / forced mergers.
What’s happening in streaming audio?
Podcasts are the FINAL frontier of mass-consumed yet barely monetized content.
With nearly a billion listeners worldwide – podcasts pulled in just $710mn revenue in 2019. This revenue was cornered by a handful of top podcasters e.g Joe Rogan, Tim Ferriss etc. Podcast are designed for free asynchronous distribution. They are not a digital marketing platform that drives measurable transactions.
Sadly the incumbents Apple and Google earn billions from their music subscriptions but their separate podcast apps are very simplistic.
In this blue ocean, Spotify has been consistently investing since 2015 – they truly created an ecosystem attractive for advertisers:
- Signed up exclusive shows with stars globally (Joe Rogan Experience, 22 yarns with Gaurav Kapur etc)
- Drive discovery through recommendation engine
- Made podcasts measurable (what section did my users drop off? Which one did they re-listen?)
- On-the-fly ad insertion like YouTube thus helping small podcasters earn a revenue as well.
This would give Spotify an unassailable lead, making them the ecosystem of choice for both customers and podcasters, leaving Apple and Google far behind and cementing its leadership in audio streaming.
The usual caveats apply – I am an outsider with no inside insights into the respective product roadmaps. I might be oversimplifying here but free Spotify is no different from FM radio with its regular ads – not ideal, but everyone’s got to make money.
What do you think? Let me know in the comments or on LinkedIn or Twitter.