Feb 13, 2020
SoundCloud just got a $75M investment — but it's going through an awkward phase Read More Before Spotify and Apple Music... You turned to Pandora for "stations" that matched your mood, fiercely skipping to find that one song. But when you tired of Michael Bublé-ish, you'd turn to edgier SoundCloud — your go-to for mashups and 50-minute tropical house mixes. The Berlin-based startup has been out of the limelight for years, but it just got a $75M investment from Sirius XM (which, coincidentally, owns Pandora):
Street Cred: Described as "the YouTube of music," SoundCloud embraced user-generated tunes and became a place for up-and-coming creators to share their songs. It helped launch Chance the Rapper, Billie Eilish... and Elon Musk's EDM career).
Growing Pains: Due to difficult licensing and monetization issues, SoundCloud almost went bankrupt. In 2017, it laid off nearly 200 employees and raised emergency funding.
Identity Crisis: As other streamers struck deals with the big record labels, SoundCloud started favoring ad-revenue-generating music from big stars at the expense of lesser-known artists, introducing paid subscriptions and licensed music.
Still around... SoundCloud made $127M revenue in 2018. But it's moved further from the DIY roots that made it popular, while still lagging on the mainstream/money-making front. FYI, both Twitter and Spotify tried to acquire SoundCloud — and both deals fell apart.The Takeaway:SoundCloud was late to the 'License Game'... Its early biz was more like users uploading songs to YouTube without copyright licenses. Now, record labels insist on licenses to use their artists' music (they can get paid on streams). Spotify was quick to strike these license deals, letting it to offer many more songs/artists (and draw more subscribers). By the time SoundCloud made its 1st label deal in 2014, Spotify and Apple Music were already leaders.
Feb 6, 2020
Spotify acquires The Ringer, adding a big, sporty fish to its pod pond Read More Primed for pod-ification... Spotify has doubled-down on its podcast offerings. The latest catch: The Ringer — ex-ESPN personality Bill Simmons' podcast network, offering 30 sports pods (+ other topics) and reportedly boasting around 100M monthly downloads. Spotify thinks podcasts are the radio of the future, so it's going in big:
Last year: Spotify shelled out over $400M to buy podcast companies like Gimlet (pod producer), Parcast (original shows), and Anchor (DIY pod recording software).
By December: 500K podcasts were on Spotify's platform.
Today: Its pod-ience (pod audience?) has almost doubled since the start of 2019. More than 16% of Spotify's monthly users listen to podcasts, and that's driving sign-ups for its paid version.
Now: It's using the Ringer to up its sports offerings. Because, you know, sports is kind of a popular topic. "We bought the next ESPN" — Spotify's CEO Daniel Ek.
The results are in... Spotify added a record number of paying subscribers for the quarter (11M), and now has 124M total (271M including its non-paying users). But that pod-ification has also cost it big. It lost $85M this quarter, in part thanks to its costly pod-cquisitions.The Takeaway:This could mean pod war... Apple is #1 in podcasts, Spotify is #2. But Spotify's got a huge lead in paying ears overall with 124M subscribers compared to Apple Music's 60M. The Ringer pods (like most of Spotify's) will still be available on other platforms, like Apple. But someday Spotify might make them exclusive to its app in a gated audio garden — if Apple does the same, it'll be a "choose your side" pod world.
Jan 9, 2020
Spotify introduces a new service to make podcast ads more like Facebook ads Read More Don't skip through this ad... Spotify could become the #1 podcast monetizer thanks to “Streaming Ad Insertion” (note to Spotify: Please rebrand that name). Instead of 1 ad per podcast played to all listeners (forever), Spotify's offering this combo:
Targeted ads: 2 different people, listening to the same pod, get different ads (odds are a direct-to-consumer mattress ad for one, a natural deodorant subscription ad for the other).
Refreshed ads: A pod recorded today could have an ad for Frozen II. Next year that ad would switch to Frozen III instead. Boom. Dynamically changed.
Nothing angers a marketer more... than when someone hears their ad, but hates their product. Cheesecake Factory making a podcast ad? Lactose-intolerant people will hear it. That's a wasted ad. They'd rather the ad target only 18-36 year-old males who like food that's cheesy, meaty, and cheesy. We've seen this before.
Facebook's ads are uber targeted (because Zuck knows you're in the "Gaga for Gouda" Facebook group).
Since targeted ads are more likely to resonate and sell cheesecake goods, they're more expensive for advertisers (and lucrative for Facebook/Spotify).
The Takeaway:Spotify’s secret weapon isn’t just data — it’s their willingness to use it... Spotify knows your age, gender, location, and what music you’re listening to (for Snacks Daily listeners, it's Post Malone, Drake, and Ariana Grande). It’s willing to use that data to segment listeners into groups hearing different ads. But pod-rival Apple hasn't been willing to do that — privacy is their major selling point.
Nov 28, 2019
Spotify is on a talent binge for exclusive podcasts — so it can defeat Apple Read More Subscribe to everything... That's the decision that music-focused Spotify made back in February when CEO Daniel Ek said he wanted 20% of Spotify listening to be non-music. When you're not Lizzo-ing or mid-binge on Talking Heads, Spotify wants you podding. So the streaming pioneer came up with a 2-part plan:
Blitz acquisitions: Spotify is spending $500M on podcast acquisitions, starting with Gimlet (a production company for podcasts like "Homecoming"), Anchor (a tech platform for creating pods), and Parcast (more pods like "Horoscope Today").
Sign celebs: Spotify just revealed to Hollywood Reporter that it's signed podcast deals with Mark Wahlberg, Jordan Peele, and... the Obamas.
These podcasts aren't for the public good... they're for podcast profits. One lovely thing about podcasts is that Spotify gets the content for free.
Music: When your Spotify playlist streams Love on Top, Spotify pays Beyonce for that. The talent gets the royalties.
Podcasts: Max Cutler, Founder & MD of Parcast Studios at Spotify told us in our live pod interview that podcasts generate revenue through their ads, not by taking their part of Spotify's revenues like 'Yonce does.
The result: A podcast listen is more profitable for Spotify than a music stream.The Takeaway:A new streaming war is coming... You can only watch The Crown on Netflix, The Lion King on Disney+, and Hulu ads on Hulu (please kill those ads, Hulu). We asked Max if podcasts would go the same way. The answer is... sort of. Exclusive podcasts are central to Spotify's plan — the Obama pod will probably only exist on Spotify, even if other Spotify pods are still available on Apple (for now). Audio streaming is tempted by the video streaming playbook.
Aug 1, 2019
Spotify hits 232M users globally — but podcasts were the star Read More Turn it up... Shares of Swedish music streamer Spotify dipped on word it added fewer paying subscribers last quarter than expected. Here's what Spotify's 232M-strong moshpit of "monthly active users" looks like:
The freebies: 129M (up 27%) tolerate an ad every few songs so they don't need to pay any cash money.
The premiums: 108M (up 31%) pay monthly for ultimate listening control.
Average revenue per user: $5.42. That's a combo of ads and monthly subscription, and it's been declining as Spotify entices broke college students to sign up.
Growth is strong, young Skywalker... CEO Daniel Ek believes his company's 31% user growth is double Apple Music's growth rate. And the percentage of users who canceled their subscription — aka the "churn rate" — hit a record low 4.6%. It's still making a loss though as it focuses on the race against Apple for eardrums.The Takeaway:It's not music. It's "listen"... Spotify prioritized podcasts for key reasons. First, it's easier to work with pod creators than 4 powerful record labels representing most music artists. Second, Spotify's pod listeners stay in the app longer (and we assume are better looking). So Spotify acquired Gimlet's collection of pods in February, along with 2 other pod-cquisitions. Add in some in-app nudging and Spotify has doubled its number of pod listeners since the start of 2019.
PS: You can "festify" the stuff you listen to into a music fest-style lineup poster (don't know how Les Mis soundtrack got in there).
Jul 17, 2019
Apple may be deep-diving into podcasts — because Spotify caught up (fast) Read More Pause... Apple is actually getting serious about podcasting after years of complacency. Bloomberg reported that the original home of the podcast is switching its strategy from reactive to proactive — it's contacting podcast producers, asking them to go exclusive with Apple: Shows only for Apple Music subscribers.
50%-70%... That's the share of podcast listens that happens in Apple's podcast app. The rest are divvied up between platforms (Stitcher, Google Music), so Apple got complacent. It didn't give creators much data about their listeners, and it didn't give listeners a great interface for audio enjoyment. Then Spotify started to catch up. Fast. Here's how:
Big goals: CEO/Founder Daniel Ek announced he wanted 20% of listening on the streaming platform to be non-music content.
Big acquisitions: So Spotify bought podcast producer Gimlet and its 29 original podcasts in February, followed by 2 other pod-cquisitions. It's committed $500M to the initiative.
Big results: Spotify is now 2nd to Apple, jumping from near nothing to 10%-20% of listens.
Spotify shares fell 2% Tuesday on word of Apple's moves.The Takeaway:Apple used to create, now it follows... With iPod, iPhone, iPad, and Siri, Apple built entirely new product categories. Now it's playing catch-up. Here are its recent 2nd-mover moves:
Music streaming ➡️ Copied Spotify
Apple TV+ streaming ➡️ Copied Netflix
Beats & HomePod speaker ➡️ Copied Bose twice
Original podcasts ➡️ It might just be copying Spotify again
Apr 4, 2019
iHeartMedia challenges Spotify with possible IPO Read More Long-time listener, first-time IPO'r... With 848 stations, iHeartMedia is America's biggest radio broadcaster. And it just filed paperwork to list its shares on public markets.
1 catch: It filed for bankruptcy last year with $20B in debt from the '08 financial crisis. So it needs to thank a bankruptcy judge who said it only has to pay a portion of that debt back.
Battle of the bands 2019... is Spotify vs. iHeart. And antenna-loving iHeart is putting up a shockingly good fight:
Total $$: The two brought in about the same revenue last year (~$6B), but Spotify's growing much faster.
Total Ears: iHeart has 275M US listeners. Spotify has 207M (with 62M in North America).
Live Events: iHeartMedia leads with 20K/year, featuring Cardi B, Ed Sheeran, and iHeartRadio Fiesta Latina.
Podcasts: Spotify has acquired 3 podcast companies this year. But iHeart already connects 16.6M podders, making it the #2 podcast creator behind NPR.
Social: iHeart's radio hosts and personalities enjoy 145M followers, compared to the 28M following Spotify's.The Takeaway:"Companionship" is the jingle... iHeart dropped that word 21 times in its IPO filing. Talk radio personalities bond powerfully with daily commuters or anybody enjoying an AM/FM dial. It barely veils resentment for Spotify's core biz of "music collection...which essentially replaced downloads and CDs." It hopes advertisers agree. 
