Podstruck #2 / Week Ending 2.26.2021
Podstruck #2 / Week Ending 2.26.2021
News Numbers, Analysis, and Opinion
Deals and Company News // Spotify // iHeart
Spotify “Stream On”
Spotify made a slew of announcements last Monday (2/22) at an event they called “Stream On”; you can watch here - the podcast segment starts at the 33 minute mark.
“Stream On'' was the spawn of a well produced Upfront Presentation and an Apple Product Event, complete with multiple angle camera shots of executives earnestly communicating new features and capabilities (highlights in “Tech” below), and introducing celebrity filled videos. It was designed to appeal to creators, marketers/advertisers, the press, and investors/wall street. The show of creative and executive force was impressive, and the hand position and gesture coaching was evident.
Spotify’s goal was to articulate a holistic strategy across all forms of audio including a sense of how their 2019 and 2020 podcasting investments fit together. Including exclusive content deals, Spotify has invested over $1 Billion in podcasting. In chronological order Spotify’s podcast acquisitions are Gimlet ($230M), Anchor ($140M), Parcast ($56M), The Ringer ($196M), and Megaphone ($235).
The deals have assembled a critical mass of technology and talent. However there is a ton of work ahead to integrate and execute. There is also perception and heavy expectations to be managed across many constituencies including podcast creators, marketers, investors, and most importantly subscribers.
From a big picture POV, Spotify has a huge global listener footprint - heading toward 400 Million each month. As of Q4 2020, over 40% were paid subscriptions and about 25% listened to podcasts. The Spotify app is likely to become the #1 podcast listener app, and all signals point to a walled garden approach.
Time will tell whether double and tripling down on podcasting was the right move for Spotify. Strategically, Spotify could have split their investments between podcasting and video, or gone further in on video. Either way, the underlying strategic goals are to diversify into fixed vs. variable cost media, add differentiated content to attract and retain subs, and add a significant advertising revenue stream to the mix.
Following its big acquisition of Triton, iHeartMedia announced an organizational change further highlighting its digital growth. iHeart will be reorganizing into two distinct divisions - “digital audio” and “multiplatform”. Digital audio will contain their digital radio and podcasting business, while multiplatform will contain radio stations and cross company sales org. All will remain under Bob Pittman and Rich Bressler, and quarterly results will be broken out by division. The move is designed in part to focus investors on the faster growing digital businesses and make it clear that iHeart has a plan to win in digital.
Revenue
Betterhelp led Podcast ad spending in January: Magellan AI’s Jan. ‘21 U.S. Ad Spending report revealed Betterhelp as the #1 spender with an estimated at $4.4 Million outlay. See the top 15 spenders and movers at Magellan AI.
CarMax is the biggest mover, ramping up their podcast investment from $59K to $1.037 Million. While the Auto category represents just 2% of podcast advertising revenue, Podstruck believes this percentage will grow and the auto category will become a leading source of ad revenue in podcasts.
Tech
Spotify “Stream On” highlights included:
Better discovery for podcast episodes with “topic search”
More content deals including exclusives like “Renegades Born in the USA” featuring 8 episodes from Barack Obama and Bruce Springsteen (sponsored by Dollar Shave Club and Comcast)
More detail on Spotify’s marketing platform to generate (and share) revenue from podcasts including streaming ad insertion (SAI), the Spotify Audience Network which enables marketers to buy target audiences across a network of podcasts, and Spotify Ad Studio’s self service platform to empower smaller buyers
More tools for creators including self-service ads to draw audience (see Marquee), and the features listed below and available at this link:
Source: Spotify Newsroom
Research and Strategy
Podcast Voice: The New York Times has an entertaining piece about “podcast voice” complete with embedded short audio clips. Among other points, the article differentiates traditional radio voice from podcast voice. Along those lines check out Howard Stern’s voice over the years - especially in 1982!
The embedded sound bites with some playful text animation made for a fun format. I”d love to see audio samples/embedded sound bites in more online writing.
Closing Notes
In other Spotify news, Reply All is now on “pause” as it works through last week’s implosion over “toxic behavior” by Gimlet executives who has just produced a series on toxic workplace behavior at Conde Nast’s Bon Appetit.
H/T to sources listed here on Podstruck.com.
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