Spotify + Gimlet/Anchor Quick Take + Worldwide Meetup Details!

Transcript from https://podmenti.com/t/7c9bd26f70ecc7fd

Hey acquired listeners.
We are here with you today for two reasons.
First, to remind everyone about our worldwide virtual meetup.
So this Thursday, February twenty first, we will all be getting together on the internet to celebrate acquired passing the million download milestone, which at this point was like a couple months ago, but uh you know, it takes us a while to plan things.
It'll be at uh five thirty pm Pacific Time, which is eight thirty p.m. Eastern time in the United States. We'll be doing it on Zoom. So we're pushing the boundaries of the medium here and and figuring out uh what it looks like when we all pile into Zoom. Um and we are structuring it as a QA with folks. So the Zoom link is available in the show notes.
And if you want to send us a question or upvote somebody else's question, which is very fancy, you can ask it in the Slack
Thanks to a very cool Slack bot that that David has set up.
Yeah, called Slido. And we're gonna have a um there's a channel live in the Slack right now called Meetups.
So head over there to ask questions. Indeed.
Alright, David, so the second reason for this episode, over to you.
Yes. The second reason is in true acquired experimental fashion here, we keep getting
a whole bunch of requests in Slack and elsewhere for our take on things like the Qual Trix acquisition last year for um
The topic of today, Spotify's acquisition of Gimlet and Anchor.
Um
But the problem is we can't do like a full acquired treatment for all these companies all at once. But we keep wanting to kill David to spend that much time at the library. Indeed. Indeed. The uh the San Francisco public library is, you know, I'm already public enemy number one here. Uh so we're gonna experiment today.
with doing um more of a quick take on some really relevant acquisitions to
Us in the podcasting space.
Talking about Spotify's.
Purchase of Gimlet.
media and anchor. So how are we gonna do this?
There is
Sadly gonna be no history and facts here. Uh we'll just discuss very briefly. But we do have a bunch of thoughts we wanna share and put out there and get your guys' feedback.
So
Yeah, and it and we should also say this does not preclude ever doing a future episode. Uh this just sort of gives us an outlet to be able to share share quick thoughts and then uh you know, as you guys know, we like to wait five plus years after acquisitions happen so that we can kind of have
history as uh as our guidepost to decide if something was, you know, really something we can grade, if it was a good acquisition or not. So know that that this doesn't preclude us from doing it in the future, but it is a little extra outlet for us.
So David, let's sho we should we hit the facts of the acquisition first?
Yeah, so facts are
Last week.
The podcasting world changed.
Spotify not only acquired Gimlet Media,
for now I I think we as of today know the numbers. They paid about two hundred and thirty million dollars for
Gimlet, I believe, maybe slightly less.
And
Also acquired anchoring.
for just over a hundred million dollars.
And then pledged that they were going to spend several hundred m million more this year in twenty nineteen in podcast acquisitions.
Boom.
In one day podcasting uh went from an uninvestable category that has not achieved venture scale to suddenly having uh you know a guaranteed five hundred million dollar worth of uh of exits this year.
Things can sure change on a dime, or as as David has said as m in multiple episodes, on a knife point.
On a knife point. Yes. The podcasting world turned on a knife point. Yeah, I think there's
Lots of people have, of course, had their takes on this, many of which I agree on. Uh Ben Thompson wrote
A great piece in the weekly n his weekly piece exponent, Ben and James also covered it well. It's funny, we've I've been doing a whole kinda mapping out of the podcasting space as lots of other people have. What's interesting to me is I
I think the
Focus is so much on content here.
I think the analogy really is is Netflix.
And what I mean by that is like
On the one hand
Spotify just paid we're taking I'm talking about the Gimlet uh piece of this. Uh Spotify just paid over two hundred million dollars for
a podcast media content company that makes just over twenty podcasts.
And the whole
advertising monetization of the whole podcasting space last year was like what, three hundred million, I think. Around around there, yeah. So why does that make any sense is the question.
This is where I think the Netflix analogy is uh comes in.
Spotify's business model is very different from anybody else.
in the podcasting space, their business model is they get consumers to pay them ten dollars a month.
Obviously that's primarily for music, but
Also podcast.
The
Money that Spotify can spend on.
Content.
If it drives more people
to pay them ten dollars a month.
And
a large portion of their user base listens to that content, whether it's Gimlet or other content they'll acquire in the future, and we can talk about anchor here.
That is
on a marginal per subscriber basis.
very low and much lower than basically anybody else could pay in the space.
Yep.
It's a great point.
And it's also worth pointing out, uh as many other smart people have on the internet uh all week, this could prove to be a dramatically better business model for Spotify than they have with music, where because there are so few providers of music out there,
they basically have uh have Spotify negotiated into a position where they uh they must give the labels a revenue share on every song played. Now a Spotify
creates these podcasts or licenses them, um, they can pay, you know, for a certain amount up front for the creation or license and and and participate in all the upside. So suddenly, you know, this this business looks like it has all the characteristics that you normally get out of a technology business, and that is sort of
why these technology businesses grow to be so so valuable is because by you know having the characteristics of uh having high fixed costs, but then getting to spread that out over just an enormous uh amount of people uh where distribution costs are free.
obviously people have have talked about all this during the week, but but what I haven't seen the point that's that's been missed to me is is
the next step of that, which is okay
This is a fixed cost for content.
But when you have fixed costs for
Any input into a business the the breadth of
your customer base that you're amortizing those fixed costs over is your competitive advantage. Yeah. Yeah. And that is that is what is really unique here for Spotify.
And so we should clarify too that we're talking about that Spotify bought Gimlet not for the content that they have today, but their ability to create exclusive content in the future and the fact that sort of Gimlet is now this hundred plus person organization that is
close to best in class at producing content that will be, you know, fixed cost for Spotify and when they start producing uh you know more exclusive shows out of Gimlet, it'll be enormously differentiating for Spotify over Apple Music, uh, where they need strong differentiation.
I would be very surprised if they take any of the existing Gimlet content and make it exclusive to Spotify. I think they've already announced they're not going to. Um but yeah, it is all about
The future content and that brings us to the other
Piece of
Yeah, two acquisitions here, which is anchor.
This one is
Super interesting. I did not see this coming at all. Uh how about you, Ben?
No, I would not have forecast who bought them, but when it became clear that Anchor uh Anchor sort of had that very excellently braggadocious uh announcement that they made recently that over forty percent of new podcasts are created using their platform, that data about
what podcasts are are starting today that are are getting traction that that was absolutely an acquisition target for somebody.
That number while certainly impressive, I I had
Thing about I've um
pulling up a picture of uh market map that of the podcasting space that we drew out on the whiteboard here at Wave.
I had viewed
The
recording.
and production segments of the market.
as not good places to
uh invest uh or build a business because I didn't think there was any money in it. There's not directly. Exactly. Right. So that's what's interesting about this acquisition. So so here's how how
we viewed the space. There's there's content itself. So you've got the gimlets, the ringer, you know, uh MPR, uh on down to
Acquired media L C
Then you've got recording, which anchor was really the only
player in outside of, you know
do your own roll it yourself, uh like we do here at Acquired and like many podcasts do.
Then you've got production and editing.
Hosting. Hosting is a really interesting piece we'll come back to. Uh
distribution, promotion
Then
On the consumer side
uh discovery both organic and paid and then and then consumption the listener apps that you all are listening to uh the show and right now.
where the big dollars are in this space are certainly in content.
Also
Potentially in paid discovery.
On the consumption side.
And potentially also in hosting, although we'll get back to that.
Uh I didn't think there was any money to be had in recording it, so I thought it was not that interesting. But Well it's recording w it's it's when it's bundled
has a strategic lever for for creating more supply.
So if it was a recording app that that's all it did and then it handed it off to someone else to sort of host and be able to have uh insights on on how that content is performing.
then it's useless. But when bundled with sort of the uh entire creation and hosting and dis and uh or I guess not distribution, but but hosting uh process.
Well, then it's super valuable. And it's interesting to think about these businesses where if you can do something that doesn't capture a lot of value, but you can do it the best in the world, then it earns you the right
to be able to get customers to use it and
own another piece of the value chain that is differentiated and super valuable.
Mm-hmm.
I think listeners are probably way ahead of us, but to put a fine point on it, the supposition that we're making here is that Spotify bought anchor not for any of the technology itself, because like not not that it's necessarily
specifically hard or or highly, highly differentiated tech, but what the tech had managed to accomplish, and that was making it easy for anyone to podcast
uh and getting a large number of new podcasts to start on the platform, which gives them a tremendous look at the data of what podcasts will be successful as they start to do more and more licensing and show creation themselves. Right. Exactly. Exactly. So you know Anchor by itself. Now of course Anchor was also a player, which is where they started before they pivoted into
Um creating. So they were almost like a audio social network. Yeah. Well, we were the anchor podcast of the day way back in the day.
That's right.
Shout out to to our good friends at Anchor and congratulations to them. This is very different as part of Spotify than it was by itself.
And probably much more valuable. Like it it's interesting actually thinking about that, that like we try to cover one plus one equals three things on the show. It strikes me that Spotify can extract a lot more value with Anchor as a part of them than Anchor ever could have created on their own.

We would never use anchor and acquired because we care so much about highest quality audio possible and controlling every aspect of production. That's
Totally fine. Which you actually you actually can use them for for just hosting. Like we could record on our you know fancy old mics here and and, you know, upload the audio content to them and allow them to do a lot of the cool stuff that they're doing with you know dynamic ad insertion and there's a lot of other technology in there that that
could have been useful to us and is useful to friends of the show that that we know that are uh um putting their podcasts on anchor. So there is sort of other reasons to be on it other than yammering into my cell phone, but
that is certainly a a large part of the new podcasts that were were created, um, even though many of them only ever released one or or two episodes.
But where I was going with it is I I don't think we ever would have paid them.
Right, probably not.
Yeah.
Recording.
Peace. And hosting is basically pure commodity.
Yeah, posting is a pure commodity. We use Libson, which is a publicly traded company, amazingly so. Thirty seven million dollar cap publicly traded company.
Yeah. Now what's interesting about the hosting
part of the stack.
substrate for analytics. Analytics are so poorly built out in this industry, as we all know and uh lives in another's bundle analytics with hosting. So whatever insights we have, you know, about uh our audience uh and and downloads and listens we get from from that
Analytics are also interesting, but I think also in and of themselves
Not valuable.
But again, how back to part of Spotify as a
as a content.
acquisition
Engine.
uh, you know, think about how Netflix works, right? Like they have
Uh they host uh of course all the
Content that they're delivering.
And then they have strong analytics.
on top of it that they use to inform their content both acquisition and production uh decisions. So you start to see how this is really important.
So the analytics, we should say, is not all the fault of the people who make the analytics dashboards. The vast majority of them don't have access to uh client side data, so you only get the information that the server sees, which is is pretty small, but there's a lot more that you sort of could do, uh, and the virtue of that is extolled in the
many, many tab spreadsheet that I have to export data from various sources and agglomerate our own uh our own analytics. And I know that a lot of the um the larger networks do the same thing. And so it's kind of a uh
Yeah.
It's a funny space.
It is amazing. I mean it shows you you know the opportunity here for
Tech both both.
Tools and software.
but also platforms and and large platforms maturing here, like the gymnastics you go through, Ben, and that that, you know, all sophisticated podcast creators go through.
And publishers is just ridiculous.
Okay, so now we have this world where uh Spotify has been growing in listener share. Uh the numbers I've seen over the last several months have been somewhere in the sort of uh seven to eight percent range. The folks at um
Gimlet sighted twenty percent, which is interesting. It must be measured either on a different uh axis or if if Spotify sort of has has
different information than what I've seen from a lot of the aggregated sources. It also could be um
Certainly for
Us uh it could be a segment issue. Like
So many of you listeners, you know, we know listen in overcast, listen in pocket cast.
That's great. I love overcast. I mean, would never listen in just a stock app, but um I think that very much
You know, it's dependent on us being in the tech vertical. Yeah. And and that's not our numbers, that's sort of industry numbers that I've been seeing. Like Libsyn released something a few months ago that said seven percent. So it's been growing. You know, they really only started doing podcasts like eighteen months ago or twenty four months ago, something like that. And so already getting meaningful share because oh my gosh, when you have
uh an app that everyone already clicks on to listen to stuff. It turns out if you give them different stuff to listen to, that's not uh so different. And that was the bet is that people who listen to music in your app will also want to listen to podcasts in your app. It was a reasonable supposition and is definitely bearing fruit. Um they've been growing and growing in share. Now
Apple has historically been the elephant in the space with fifty, sixty, it used to be like eighty percent of uh listens happening in the Apple Podcast app. Spotify is slowly chipping away these acquisitions, you know, if if they can really uh uh produce differentiated content, you know, the the the next serial being produced on uh
Spotify is a very real possibility, and one could make the argument, well, the next it won't be the next serial if it's on Spotify because it will only reach a fraction of the people. Well, you know, there's a chicken and the egg thing here, and they can kind of keep leveling up, and if they get a larger and larger percentage, there is a chance that they could create the next serial on their platform. And the the same way that when uh Netflix releases Birdbox,
uh if they have a a hit that they are able to release the content access marketing and could go drive a bunch of people to sign up for Spotify purely to get access to that exclusive and differentiated content. So um that is sort of the white whale that that they are chasing here.
is that differentiated content will accelerate the pace of uh Spotify having listener share and get closer to be the uh the largest player in the market.
The podcasting world really did fundamentally change last week with this, and it's because
of
this business model uh point, which is Spotify is the only player that now has a very not only a very different business model from anyone else in the podcasting space, but I would argue really the only viable business model. Like Apple, unless they change their their model
Apple has no incentive to go invest two hundred million in content for podcasts because they're not making any money off of that. Whereas Spotify is doing the math and running the analytics and saying, like, okay, great, uh if we can
Produce or acquire.
uh this compelling content and we're willing to spend a lot on it and that drives enough subscriptions for us, like
We'll take that.
All day.
There's a lot, a lot happening in the podcast space.
I'm so far from from
being willing to say the only viable business model. I think that lots of there's lots of people that have lots of announcements that are uh Oh sorry. The only viable business model
Today. But I think that's going to change.
We're releasing this only days from now, and at the pace the space is moving right now, it wouldn't surprise me if uh
I don't think anybody's gonna announce anything over the weekend.
It's true.
What I think we should ch chat about next is
Okay.
Great.
This is now the
uh Paul Revere, you know, riding through uh the the shots have been fired, the British are coming, you know the um the Swedes are coming with Spotify.
What's next for the space?
I think the question what's next and what will happen
can be broken down into who are the stakeholders and what do they all want.
And if you look at the alignment of incentives and you sort of uh form some beliefs around how the sequencing will happen based on what those incentives are, you can sort of come out to what possible scenarios for the future are. So if you look at the stakeholders, there's people who produce audio.
So everyone from networks to acquired to somebody who is producing audio for the first time and someone who, you know, is thinking about starting a podcast, which is I don't know how many millennials are there?


The question is how many podcasts
Will each millennial create. That's a great point. I my my model doesn't take that into account. Yeah. What's the uh what's the multiplier on there? What's the slip. So uh there's the audio creators, there's the um
uh listeners. And then there's these businesses that that are are trying to sort of sit in the middle of these things. So there's there's Apple, there's Spotify, um certainly there's these players that have been at it forever with you know Stitcher, um there's a there's a lot of really uh great listening apps out there today like Breaker. I think we should start with listeners and creators first.
and then back into platforms.
So
I'll I'll pose this question to you, David. Should podcasters
allow their podcast to be distributed on Spotify.
Is that in their best interest?
Well uh we have had a bunch of conversations over the over the past day about this. Um I I th here's my view. I think yes, uh a hundred percent because
Any incremental audience is great audience and
We'll come back in one sec to uh why that is going to get even more important.
The answer is assuredly yes, unless and until
Spotify
Makes
a product change to go to an algorithmic feed instead of a subscription model. So if Spotify starts looking more like YouTube where they
Control
access.
uh access between you and your listeners, that's a dangerous place for podcasters. Like, hey, what should you listen to right now? Hey, this is what we recommend based on things that you've given signal to over time. Exactly. And and and and there's nothing wrong with that for discovery. I mean that's what uh breaker does, but it's when that becomes the primary
listen mode like on YouTube. And this is why YouTube creators are so upset at the platform is they say, like, hey, I have my audience people subscribe to me
people follow me and then you intermediate that and then I don't reach them anymore.
If Spotify does that, I think then there's a question sh should you be on it. I don't know that they will, and they certainly, you know, aren't going to any time soon.
Right. It's I mean Spotify today looks basically like a glorified RSS reader that that, you know, hey, look, the uh feed that you subscribe to got a new thing, that y go listen to it. The reason I don't think they will.
Is
Or or or it's not a slam dunk that they will is because again, think think back to the Netflix Netflix analogy. Like they are
going to invest a lot in creating tent pole
Triple A content.
Great. They're obviously gonna make that discoverable and merchandise that in the app.
But they're they're not like YouTube, right? They're not trying to maximize
number of listeners to show ads alongside.
Their business model.
Is a ten dollars a month per
subscriber. Like YouTube, they want you to
Watch as much content as possible for as long as possible so they can show you as many ads as possible. Spotify just wants you to pay them ten bucks a month.
Spotify wants you to be the have the highest, as Tim Cook says, customer sat uh with your experience.
As long as Spotify believes that is getting surface the content that you have subscribed to, then it will stay that way. To the extent that it ever changes.
And they're like actually a newsfeed.
of content that's that is uh really well tailored for you.
Also, we happen to put our first party content in it. You know, also we happen to w for whatever other uh uh reasons put other things in it. That is the scenario where that's the danger.
The where you become, you know, um uh a journalist uh on Facebook.
Yes, yes.
You make a really good point that I actually have not heard anyone make yet. That is their business model
So if we walk backwards from like why does Facebook have a newsfeed?
Or why do they still have a newsfeed? Let's not take it from the initial implementation of it. But you know, why have they doubled down so hard on the feed? It's because
It happens to be the greatest format in humanity to show ads.
Yep.
And and to and to keep your attention.
Right.
Spotify.
uh their business model is completely different where you know they're they're not trying to show you ads. Uh also the way that they keep your attention is not v visually, so there's not like that that sort of feed metaphor. The question is, is there like
You know, there were these great apps that happened, uh, Swell, 60 DB that were sort of these like algorithmic short form audio, we're just gonna play stuff that we think you like.
The question is, will Spotify's ten dollar a month customers be more delighted with a primary experience around here's some stuff you like uh than they will with uh here's the latest episode of a thing that you have uh uh directly created a relationship with and subscribed to?
Perhaps. That's why I say perhaps. But but I don't think they have a
uh nearly as much of a um like if Google had bought Gimlet or Facebook had bought Gimlet, uh yeah, I'd be super worr as a podcaster about putting my content on those platforms. Spotify, uh, we'll see. We'll see.
Like what if Netflix opened up the door for anybody creating video? Why hasn't Netflix done this? If you're on YouTube and you also want to upload your content to spot to Netflix, here's a way to.
Like that's what happened to us in Spotify. We we got the opportunity to just say, Cool, yeah, we can put it there too and reach their audience.
Why hasn't Netflix decided that any freely available content on other platforms should also be available on ours?
I wonder if with video it's a bandwidth and hosting issue.
Like No. That actually that costs a lot of money. Remember that's why pr perhaps misguidedly, that's why I gave YouTube a C, right? Uh probably our worst grading ever. We're definitely gonna have to redo that one.
the question is like it does Netflix believe that that will increase subscriber
acquisition or retention? Probably not. If it's content I can get elsewhere, probably not.
And so Spotify looked at it as
It's super cheap, so why not?
Or Spotify probably looked at it as, well, we wanna have exclusive differentiated content and the way to train people to
listen to spoken audio content here at all at all is to index the publicly available stuff.
That's probably more of what it is.
I'm sure they didn't uh
emerge from the womb with their strategy fully formed around podcasting. They I'm sure they were experimenting too. Yeah. Um
But okay, so
why as a podcaster do I really
You know.
In
the world of twenty nineteen, why do I really care about getting more listeners?
What's changed there? Well, um
We are living proof. So a lot of folks know this, but uh LPs definitely know this. The LP show is going really well.
If you look at sort of
podcasting as a funnel. Our bottom of funnel is folks that are are directly paying to uh access
bonus content and go deeper on the show. So you can pay five dollars a month and go beyond the standard episode format that Dave and I do and
Listen to us talk about stuff like product market fit and interview awesome people like Doug Rand, who talk to us about the supply chain of uh uh of clean energy funding in the US. Like all these cool topic that like
David, you and I are curious about, but you know, don't really have an opportunity to do on the show. And so like, oh my gosh, there's a business model now to be able to directly monetize some percent of your audience in a super aligned way with with their interests. And uh
By having more listeners, you now have this this business model available to you, either on top of of sponsorship or in addition to sponsorship, where the larger your whatever that percentage is that that a show is able to uh uh to convert to, you know, something like a limited partner program, the more the top of funnel matters too.
'cause listeners to the show probably know Ben and I started thinking about this.
last summer and um
You know, the outcome of that of course is the limited partner program, but also the company Kimberlite, which uh
Uh we've been building, Ben's been building inside of PSL um that is powering the limited partner program.
And is soon gonna be available to any podcast to use.
Yeah, we're super pumped.
Super, super pumped. And so now, you know, this is the other, I think, major that is happening in parallel to
the world changing announcement of of Spotify.
uh last week is that as a podcaster, now no matter what size you are, whether you know you're an acquired and you have
tens of thousands of listeners, or you're a, you know, small podcast that has hundreds of listeners, or even you're a Joe Rogan that has millions of listeners, you can implement a
Business model.
Uh that is
aligned with creating great content.
Aligned with
uh connecting with and supporting, you know, your fans and your community. And as we've seen
Unaquired, you know, again we
started the limited partner program for two reasons. One, we wanted to do it. Two, we wanted to experiment and see, you know, the market opportunity here. Um, but it's going to be at least it's it's on track. It's growing.
way faster than our advertising revenue did and and will become our primary business model over time. And that's not to say we don't love our sponsors. We actually think we have this like a crazy also aligned uh uh sponsorship model on the show, but like
It is so cool to both be able to produce this second stream of content that we've been wanting to do for a while and it feels like it's just it's a it's it's a really good sort of value alignment uh with the audience. You know, not to be on our our soapbox about
like Kimberlight specifically, I think obviously if you're interested, you should definitely go to Kimberlight.fm and check it out. And we we'd of course love feedback or if you want to use it, anything like that. But this the notion generally that
you know, we're moving to an era where you know, independent creators can can have this relationship with um with audience and have sort of sustainable business models where content can be directly funded by folks that it is most resonant with. It's just a cool, cool era to be in.
Yeah. Well that's what's um
Uh part also why we wanted to uh
Do this as our first um
Yeah, sort of mini episode and get our thoughts out there.
Is uh
You know, for so many years, and especially all of last year in 2018, everybody was talking about what's up with podcasting? Like is this just a bad space? Like all this attention, but somehow no monetization. Yeah, it's all this attention in uh billions of listener hours and yet only three hundred million in, you know, monetization for the whole space. What's going on here?
Well now
all of a sudden there are two extremely viable business models in the space at at totally different
ends of the spectrum and I think they're gonna coexist.
Completely.
Which is
Tent pull, big content, you know, Spotify.
Paving the way there.
Um, but also bottoms up direct monetization for podcasts of any scale.
And interestingly, yeah, with the same business model of this this direct pay for content, albeit you know different, you know, one is uh um pay to get access at all and the other is sort of pay to to either go deeper or but but who's to say people won't use Cimberlite to do all sorts of interesting things with structuring how uh how you pay for content.
Someone could use Cimberlite like we are to to uh
An extra show, you could do it for a whole show. You could do it for every other episode of a show.
Well, we won't be doing those things in acquired, but uh who's anybody could use it how they want.
Don't make promises, David. We don't know yet. Don't worry, listeners. The main show will always be
Free and uh always um
Well, I was gonna say hopefully always is great as well. Oh, I didn't I didn't even mean that. Not in not in like a threatening way, in like a like have you and I ever actually like
stuck to something it's like, Oh, this show is just about acquisitions that actually went well. Wait, it's about all acquisitions. Oh my gosh, add IPOs. Wait, also we tell the story of definitive companies. Yeah. We we uh uh like we are in this very moment, we always reserve the right to add more to acquired. But don't worry, the core acquired show uh will always
Um, will always be what it is and will always be open and free to everyone.
Indeed. Okay, so we covered the creator side. I don't think we need to spend as much time on the rest of the ecosystem, but I do want to make sure we round it out so it wasn't like why did they go on that big long tangent and then end. So the audience side, I think it's a win for listeners who want to, uh particularly listeners who aren't enormous podcast fans and aren't gonna have a dedicated app for it.
um but have one or two that they want to listen to or potentially ha
uh be exposed to podcasting when they otherwise wouldn't have been exposed to it. So it can kind of be a gateway to sort of more dedicated podcast playing experiences. At least short term, it is a really good thing for um podcasting to to be available in Spotify. Longer term, I think there's sort of an open question of uh and this gets into sort of like the
philosophical dueling that happens on the internet, but is it better to have this sort of all open ecosystem? Is it better for uh a company to have a lot of control and be able to like really deeply optimize the experience, but at the benefit of their own business? You know, I I think there's l lots of uh uh discussion and crosstalk that could happen there, but I think listeners want to listen to content that
they like in the most frictionless way possible. And so every step that we have toward that seems like a good thing for for listeners.
And
They're now being
Two uh at least two and perhaps more. But I I think
probably two core viable business models.
in the space to support it is only gonna be great for
Listeners.
Podcasting content.
available to listeners has grown exponentially over the last few years.
And just think about now. It's insane. Right. But how much of that content has been of the quality of
Gimlet.
uh of the quality of um
You know, uh
I won't say acquired, but uh people, you know, th there's a lot out there, but now there's now that they're business models to support people investing in content, that's only gonna
mean more quality content.
Uh just like we've had the Renaissance in television over the last few years with Netflix and Amazon video.
I'm very curious to see. So Edison Research does a survey every year to see sort of like uh are more people, you know, what's the current state of podcasting? And they ask things like how many people listen weekly, how many people listen monthly.
Th there are some staggering stats around how mainstream podcasting is now, that almost eighty million people listen monthly, almost fifty million people listen weekly. When people listen to podcasts, they spend an average of like six and a half hours a week listening to podcasts. So that's that that applies to weekly listeners. The growth rate of podcast among Americans is modest. It's like fifteen percent per year.
But the number of new podcasts created is like exponentially growing. Something like
I don't know.
Ten 10 to 15,000 podcasts created a month, which, you know, I'm sure most of have one or two episodes, but um and and are are are not saying there's 10 or 15,000 reply alls created every month, but um, you know, there's one. But it's interesting to look at the growth of the space across all those different vectors of number of shows is huge.
Audience base is relatively large. Growth of audience base is relatively modest.
But I think this year I bet we'll have a jump um by it really entering the public consciousness. And also I I think Spotify will probably deserve a lot of the credit for a a bigger than than normal year in podcast listenership in the US.
Podcast listenership has grown all completely organically. Again, because there haven't been viable business models.
There has been no ability or incentive for anyone to spend on advertising and marketing for podcasts.
That has changed now. You're gonna start seeing certainly Spotify, but podcasts being a marketed to you on television, on billboards, on you know, where do you see movies marketed to you?
Especially if you're driving through LA.
Yeah, exactly.
the way that we've been thinking about this in the world of Kimberlite is like people can't
be trusted to spend money.
Or you can't expect people to spend money when they don't have trust that that money is well spent. It's definitely a flywheel of um enabling confidence that there's a an ROI on your spend will dramatically increase the the amount of money flowing through an ecosystem.
Mm-hmm. And that just wasn't the case before, but now
You know, again, even down to the smallest podcast.
Every incremental listener that comes to your show, if you're monetizing via Kimberlite uh or or a similar platform, you are getting ROI on that spend.
You know, I didn't put two and two together till now, but uh Ben, one of your p one of your carve outs uh from perhaps years ago at this point, uh the Dissex Podcast, which is
Unbelievable I finally started listening.
Oh yeah?
That was the blueprint, right? Uh that's what you're gonna see. It was Spotify licensed
Cole created this amazing content. He was an independent creator.
Just incredible. If you haven't listened to the Disac podcast, by the way.
Season two. I mean
You know, who could not love diving into it. Beautiful dark twisted fantasy. Uh I have so much more appreciation for Kanye now, uh than before I listened to that. For folks who weren't listening a season or two ago when that was my my carve out, it is every single episode. So the season is an album.
So they the Cole Kushner um uh analyzes the Kanye West album, My Be Beautiful Dark Twisted Fantasy. Every episode is a song and it's an hour long, and he basically he's uh both a great storyteller and also a music producer. So he uh dissects all the lyrics and then he dissects the beat and he's he basically builds up
um the entire instrumental track for you to talk about where every bit of it came from and how it all sort of aligns with the um the sort of artistry of the vocals and it is completely beneficial. It's incredible. Yeah. So yeah, so Spotify, uh I think it was right after season two, at the end of season two, Cole
uh was just a guy like us, had a day job and um uh did this on nights and weekends and um Spotify hired him and now he creates it full time for for Spotify, but it's still accessible to everyone in every feed.
It's a very soft hammer they're brandishing. It's like oh it's it's produced by us, but you can listen anywhere.
Oh, it's windowed a little bit. Oh, you can hear it for the first week here on Spotify, but but still everywhere.
I mean there there's definitely uh oh, we're putting up a billboard for the Amy Schumer show that we paid a rumored million dollars to uh to have her come to a show with us. And of course all the billboards say you should listen to the Amy Schumer podcast on Spotify. Uh of course you can listen e everywhere else. We're not gonna take it off everywhere else, but like
Everyone ends up listening on Spotify'cause all the billboards say to listen on Spotify. Like it is it's a pretty well executed plan.
Mm-hmm, mm-hmm.
Oh, this is
a a huge moment for for them and and the industry, as we've been saying. So all right. So David, you you asked the original question and then I danced around it, um, of sort of what's next for the ecosystem. And we've talked about now what's good for listeners, what's good for creators. I don't know. What do you think?
I think this is the beginning of the golden age of I would call it the golden age of radio, right? Like uh people talking about the golden age of television. It's not television anymore. Uh you know, Netflix and and prime video.
are to television what podcasting is to radio.
It's been bubbling up slowly over the last
Gosh, fifteen years, right? That podcasting has been a thing? Two thousand six, I believe. Yeah. Yeah, so thirteen years. Probably kinda just like online video was a thing for a long time before
Before the golden age. Uh
really emerged. But I think that's uh I think that's what we're heading into.
And I do think even though Spotify is doing a uh you know a great job of uh of really getting more listener share, there's quite a bit of pie growth. So like m more people listening to podcasts. You know, I do think there's some steady state where I don't think this will be entirely owned by one player. I do think
players and other large companies are gonna continue to do things, particularly now that the Spotify thing has happened. It's probably woken a lot of folks up. Um, but I do think we'll kind of continue to see a a fragmented player experience for a long time. And I think in some ways, uh podcasting apps are a lot like to-do list apps or weather apps or uh
uh what are the other sort of like UI playgrounds, uh uh ever everybody's kind of finicky around like what's the best productivity software? Ask ten people, get fourteen answers. And so I think there's definitely an amount here where
will continue to see fragmentation for a long time. Spotify will build an excellent business in in podcasting. It will bolster their whole business. It may even be bigger than music at some point. Who knows? But Yeah, other companies will too for sure. This is is not a winner take all space on the on the content side. This hasn't happened yet, but I think it's going to now
uh just like multi homing is super easy in video
You know, I watch stuff on Netflix and Amazon and YouTube and, you know, uh whatever. I don't really care where it is. I just watch great content. Um, you know, and Apple and
Disney when they launched their streaming service. Um
Disney plus the uh
Best best name ever.

Indeed.
Alright.
Do we have anything else?
Have we navel gazed sufficiently here into uh the world of podcasting?

Uh I think that's it. So um
Listeners, we hope to uh see you

worldwide virtual meetup next week. We would especially love to hear your
Thoughts and feedback and questions on um this topic and this format. Do you want to see us do more?
Of these
Short episodes around big announcements.
Would you rather us not clutter your feed? Let us know.
And w these will be weird. There'll be like podcasts that are released that are not numbered that say quick take that don't have the research we normally do, but probably do have this kind of I would I would guess this one's longer than a normal quick take episode. They'll probably be this sort of ten to twenty minute, but honestly, who knows?
We would love your feedback.
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Indeed.
We'll see you on Thursday.
See you on Thursday.