Spotify's Big Bet On Podcasts Is Failing, Citi Says (cnbc.com) 64
An anonymous reader quotes a report from CNBC: Spotify's multimillion-dollar bet on podcasting may not be working out, Citi analysts wrote in a note to clients Friday. "The cadence of Premium gross additions (through 3Q20) and app download data (through 4Q20) do not show any material benefit from recent podcast investments (that began in 2019)," the analysts wrote. The firm downgraded the stock to sell from neutral.
Spotify kicked off its venture into podcasting in early 2019, after acquiring podcast companies Gimlet Media, Anchor and Parcast. Since then, the company has acquired sports and entertainment news company The Ringer, as well as Megaphone, which will bolster its ad tech business. It also spent what's likely millions gaining the exclusive rights to stream celebrity podcasts, including those from Joe Rogan, Kim Kardashian West, Michelle Obama and The Duke and Duchess of Sussex. The idea was that by bringing exclusive content to the app, the company could strengthen its advertising business as well as bring in Premium subscribers. "To date, we have not seen a material positive inflection in app downloads or Premium subscriptions," the Citi analysts wrote.
"If we were to see a material positive inflection in app downloads or Premium subs (from higher gross adds or materially lower churn), we would alter our view," they added. "But, our fear is that if podcasting doesn't provide a way for Spotify to shift away from music label dependence, the Street may reassess the underlying value of the business. And, that would be bad for Spotify's multiple and equity value."
Spotify kicked off its venture into podcasting in early 2019, after acquiring podcast companies Gimlet Media, Anchor and Parcast. Since then, the company has acquired sports and entertainment news company The Ringer, as well as Megaphone, which will bolster its ad tech business. It also spent what's likely millions gaining the exclusive rights to stream celebrity podcasts, including those from Joe Rogan, Kim Kardashian West, Michelle Obama and The Duke and Duchess of Sussex. The idea was that by bringing exclusive content to the app, the company could strengthen its advertising business as well as bring in Premium subscribers. "To date, we have not seen a material positive inflection in app downloads or Premium subscriptions," the Citi analysts wrote.
"If we were to see a material positive inflection in app downloads or Premium subs (from higher gross adds or materially lower churn), we would alter our view," they added. "But, our fear is that if podcasting doesn't provide a way for Spotify to shift away from music label dependence, the Street may reassess the underlying value of the business. And, that would be bad for Spotify's multiple and equity value."
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> Catering to libtards is a failed business model.
I don't think so. Pushing liberal or left wing ideas while punishing (and often boldly stating, as if it were an act of defiance, opposition to some right wing strawman position) works amazing for Hollywood, and for pretty much all TV programming. It is a much more mixed bag for video games, often running in to issues if they push too hard- usually in gaming they have to settle for giving a bunch of money to a cause du jour or writing a sternly worded b
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Proctor and Gamble made a man-hating ad a few years ago for their razor brand, Gilette, and they sure didn't "go broke".
No, but they an $8Billion write down the following year.
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Games have actually improved quite a lot in the past decade. Choice of gender for your character is pretty common now, as is playing female characters who don't look like Fetish Barbie dolls. There is also more representation of LGBTQ people in games, including as main characters.
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>as is playing female characters who don't look like Fetish Barbie dolls
And the guys are now allowed to be ugly, fat... oh wait
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There's definitely a case to be made for improving the portrayal of men in games, yeah... Mortal Kombat X is an interesting example. They made the women look more realistic and wear almost sensible clothing, but not the guys.
lsm99 (Score:1)
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Correct he's a self admitted socialist Bernie Boy that just happens to interview whoever the hell he wants to the SJW's dismay.
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“I’d rather vote for Trump than [Biden]. I don’t think [Biden] can handle anything. You’re relying entirely on his cabinet. If you want to talk about an individual leader who can communicate, he can’t do that. And we don’t know what the fuck he’ll be like after a year in office. The pressure of being president of the United States is something that no one has ever prepared for. The only one who seems
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It's easy to take a sentence out of context like that so +1 to your SJW skills.
Add the rest of the paragraph and you'll see Joe was really mad that Bernie didn't get the nod and would rather have just about any liberal in the office than Biden.
Which is fair, it's still amazing that shambling joe won anything it's a testament to keeping him in the basement and ball gagged than anything he personally did.
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Can we please go back to removing anonymous posts? This isn't a platform that is enhanced by anonymity.
Are they still adding features? (Score:1)
They only recently added video. They also need to add a commenting system. Half the value of the JRE pod casts was interacting with other viewers and reading the "Joe 'insert comments here' Rogan" posts.
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Joe "I'm still keeping the $100 million dollars as per the contract" Rogan.
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Don't forget videos.
Spotify a terrible platform and not just the platform. I tried to stream the Rogan video using their app and it would just default to audio.
I actually stopped paying them money after their employees threw numerous fits. No reason to pay good money to bad people.
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Telling the team that writes the video player that their video player sucks balls would make them feel bad.
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Ah, yes, Spotify. "Bet you can't build a media player for Windows that sucks worse than iTunes." "Hold my beer and watch THIS..."
Re: Are they still adding features? (Score:1)
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1/8" for life...
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Conversely commenting systems don't work when anyone is allowed to say whatever they like with zero moderation, it just devolves into a mixture of spam and trolling.
There has to be a balance between the two or it's rather pointless.
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A bit off topic: my view of moderation is it's very good in small communities on small websites. When your website becomes main channel of communication for entire population it should be treated like public property (roads, police etc) and become heavily controlled by law. Including freedom of speech articles.
More basic than that (Score:5, Insightful)
They only recently added video. They also need to add a commenting system
The issue, I think, is more basic than this. It is, very simply, that there is already great and vibrant podcast community and infrastructure build around the very open RSS model and existing podcast consumers simply don't want that to change. They are afraid, rightfully so, that downloading Spotify is just giving them the power to choke out independent producers.
For podcast consumers, there is no value added at all for Spotify. Only the dubious pleasure of having, in addition to a podcast's own ads, more of their own inserted randomly. No one wants that. And no one wants another Bright Sessions debacle. For those that don't know, The Bright Sessions was a great sci-fi/supernatural fiction podast available through all the standard distributions and funded through Patreon. It was one of the more popular fiction podcasts, until they decided that they were going to move to Luminary. They didn't just move though, uh uh. You see they had a per-episode model on Patreon, so every time they released an episode it triggered a new donation. So they released nine tiny little mini-episodes, used the money that triggered to fund their next season, and then instead of releasing that season, they cancelled the show. But lo and behold you can sign up with Luminary and listen to their "wholly new" podcast, "The AM Archives". It was, of course, entirely the same show and they never got the subscriptions on Luminary they hoped.
Nobody wants a Luminary or Spotify to become the Netflix of Podcasts. Nobody wants a Netflix of Podcasts period. We all see what happened with Netflix and where it is trending. From "watch any TV show or movie ever produced" to "watch a lot of great TV shows and a fair amount of movies and some great ones we make" to "watch us lose all our contracts for TV shows and movies, watch the occasional great show we make, and a lot of mediocre ones we also make, then watch us cancel great shows outright while fighting the film and film awards establishment, and increase our price on back-to-back-to-back years".
Nobody wants that in podcasts, and podcast consumers are strongly resisting the push to move to that model.
Re: More basic than that (Score:2)
I have a more fundamental problem too: I go to Spotify for background music when working or hanging out. Then they push talking people in my face which is the opposite of what I want and just frustrates the one thing they still do reasonably well.
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Kim Kardashian (Score:4, Interesting)
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I'll probably agree with you that Kim Kardashian is not worth listening to on a great many topics, but she's n
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Why precisely is that? Can you name a society in any time or place that only paid attention to persons or messages that you would deem wise? It doesn't exist and if you think it does, it's only because so much of human history has been lost to time. The graffiti on the walls of Pompeii suggest humans haven't really changed a lot in the last several thousand years.
Well, isn't that why we shouldn't have much hope for civilization? Because we never learn?
Re: Kim Kardashian (Score:1)
Should they help fund raise ? (Score:3)
Between this and Pocketcasts... (Score:3)
I totally wouldn't mind just going back to RSS feeds for auto-gathering the podcasts I care about.
Apparently, it's just too much work for a company to do with automation and still run a company.
Heck - seems like we might just be seeing a weird revival of the general web to a degree we haven't seen since 2010.
While we're at it, can we lose the term 'app' for a program - just because they're on a walled garden platform, never make them that much different - they're just paywalled better. Which was hardly ever a term of anything better, in my eyes.
The term app doesn't feel like the future anymore. It just feels like restriction.
Ryan Fenton
Somewhat predictable (Score:4, Insightful)
It also spent what's likely millions gaining the exclusive rights to stream celebrity podcasts, including those from Joe Rogan, Kim Kardashian West, Michelle Obama and The Duke and Duchess of Sussex. The idea was that by bringing exclusive content to the app, the company could strengthen its advertising business as well as bring in Premium subscribers.
Can't say I'm surprised - I really doubt many people are really craving "premium" podcasts, not matter how popular the celebrity might be.
Podcasts are cheap to make (way cheaper than video), and are plentiful - it's not like you can't find something else to your liking - there's no "must-have podcast" like there might be must-watch shows
Frankly, I'm kinda glad it's not working out for Spotify (and hopeful it won't either for Apple's plans) - I prefer for podcasts to remain freely available just as they've been, because I'd hate to see podcasts go the way the free internet got lost with walled garden content controlled by a few media behemoths.
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The term streaming was invented for a reason and this scenario isnt it. There is no necessity for a "streaming service" to be fetching and sending bits of audio podcast data outside of live broadcasting.
Downloading is the correct term and nobody needs a
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This. I tried an audiobook from a common library app that insisted on streaming. It was really annoying and pointless, the embedded player sucked and it turned me off from the experience. And they didn't have a big selection. The one selection I did play though was great. I would have paid $1 for it though the point was to find free ones.
I'm not sure podcasts should be commercial but I might be willing to pay a small amount if there were actually ones I wanted to see and the experience was easy. Though I do
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The problem is most podcasts are crap. They tend to fall into one of two categories:
- News, where you would be better off just reading an article, but can be nice for filling time like when commuting.
- Interviews, and unfortunately most interviewers are quite poor.
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No reason you can't have a mixed model. Podcasters have always complained about the poor business model and the need to get ads and sponsors.
There will always be a ton of free (sponsored) podcasts. Bu
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There will always be a ton of free (sponsored) podcasts. But there are also going to be a few who want to create a "premium" podcast that requires a paid subscription. I personally feel it's their right to do so, and whether the market accepts that or not is for the market ot decide.
Another aspect I didn't mention that I don't want to see happen: I don't want my privacy raped by said behemoths (Apple included).
If "premium" or even just platform exclusive podcasts start happening (instead of being freely available/subscribable from anywhere without specific apps), we'll see the same degradation of available content as we did with the regular web - the 'better' podcasts will go to one of a few closed platforms, and the rest will essentially be hobbyist that do it for fun - we'd probably
You can't buy your way to victory like that. (Score:1)
Re:You can't buy your way to victory like that. (Score:4)
Ugh, advertising on premium services is wholly unacceptable.
It's the reason I will never pay for Sirius/XM radio. One of my coworkers has a membership so we stream it. They play the same songs every day, and while they claim to be commercial-free, they are CHOCK FULL of commercials for their own content. It's still a commercial if it's for content on your own network, you fraudulent fucks! I don't want Bono coming in between good songs to advertise his channel. Bono can fuck off into the wind sideways.
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The ads are basically this:
"Tired of us only playing the 5 same songs in a loop all day on your premium subscription service? You have to change channels for that."
Re: You can't buy your way to victory like that. (Score:1)
Podcasts aren't Music (Score:2)
I just glanced at the Spotify player looking for the podcasts I like. It seems like it could probably do most of the things I want, but I suspect it would be a bit of a pain. Podcasts aren't music, I don't listen in the same way or in the same situations. I'm not sure a single player can effectively do both.
Podcasts diminish Spotify (Score:3, Insightful)
I loathe the thought that as I pay for my Premium subscription, they give some of that money to some celebrity podcasters.
At least Spotify make the podcasts a separate subscription. Then they would see who really sees value in them. I am about two months in on my 4 months for 2â Tidal Black Friday deal, and while the UI and recommendations suck, at least it is about the music, instead of talking.
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How is this complaint different from complaining about genre of music you don't like being on spotify?
The entire premise of spotify is that it probably has all audio you want. Podcasts are simply another addition to the library. Now whether video podcasts like JRE are a good fit for the platform is a whole different story.
Re: Podcasts diminish Spotify (Score:1)
Well, if I would know that they have unlimited resources on developing the music service, and none of the money I pay is spent to running the music service & paying artists, I would be ok.
But I think it is highly likely they are diverting limited resources from the music part to the podcasts. Hence my claim that the service I pay for is diminished by podcasts is likely true.
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Just think of podcasters as a new type of music that you really don't like. Service here is just as diminished by said podcasts as it is by access to music genre that you don't like.
Subtracting value is not a market position (Score:3)
Lets compare briefly how Spotify has handled stuff, as opposed to say, Netflix.
Netflix bought the rights to things that weren't being used much- streaming rights, which Netflix aimed to prove were undervalued. Knowing that these rights would be taken from them as soon as they proved them profitable, they also began funding their own products.
Spotify aimed to BUY products that already existed for free, and make you have to listen to them on Spotify. This is how, for instance, they bought Joe Rogan; they simply paid him money to not list his podcast anywhere else. Around this time, Joe Rogan deleted old episodes that would not sit well with his new company's values, which bothered some folks, but not others. Regardless of your opinion of this, however, Spotify didn't pay to create or boost Joe Rogan. It's not "Spotify Original Programming".
Some things are, of course- the Michelle Obama podcast seems to be (and not to be completely exclusive). But overall, Spotify hasn't exactly flooded the market with super amazing podcasts for every niche, or whatever strange multispectrum approach would perfectly fit podcasting. There seems to be an emphasis on celebrities and politics- things which are guaranteed to have a large but finite following. It's hard to sharke the feeling that for way less money, they could be all over a variety of smaller interests, which is normally what podcasts are all about.
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Spotify didn't pay to create or boost Joe Rogan. It's not "Spotify Original Programming".
How is Netflix buying Arrested Development and then producing new episodes different from Spotify buying JRE and then producing new episodes?
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OP already answered that, but I'll rephrase.
JRE was widely available and free for download with any good podcast app, or via youtube. Presumably it would have kept going like this without Spotify's help. Instead they bought it out. now we have to use the (Closed source) spotify app, watch their ads, and pay their subscription fees, and the show is worse off with big corporate ads and censorship.
Arrested Development on the other hand was never freely available. (Other than over broadcast TV.) it was out of p
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At the time, Arrested Development wasn't really being watched anymore. Very underrated, but I didn't hear about it until long after it aired.
I downloaded for podcasting, it was a kludge (Score:2)
I downloaded spotify app especially for listening to podcasts.
I was not suited for the task at all. I quickly dumped spotify for a dedicated podcast app.
So I'm a bit surprised that they "pushed for podcasts" as this is completely contrary to my experience.
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The Spotify app is terrible for podcasts. It doesn't support automated downloads. So every time I want to leave the house, I need to check a list of episodes and manually download them? That sucks!
I'm a long-time paid subscriber to Spotify. I still love the music side of things, but the podcast side is awful, and it sucks that at least one podcast I followed previously moved to Spotify. I'm sure the podcast is losing listeners because of this, and for that, I feel sorry for the producers of the podcast
PODcast failure (Score:1)
Followed Rogan over to Spotify (Score:2)
Who cares? (Score:1)
"...Joe Rogan, Kim Kardashian West, Michelle Obama and The Duke and Duchess of Sussex..."
I would pay to AVOID listening to those. Well, maybe except for Rogan. His contrarian guests will soon be cancelled, anyway.
Pretty Piss Poor Podcast App (Score:2)
No RSS == Not a PodCast (Score:2)
epicwin (Score:1)
Spotify UI is pretty bad (Score:2)
There is no way to stop video when bandwidth is limited, most of the time I am not watching a podcast I am listening to it while working/walking/etc
There is no way to "mark all played" on windows client (useful when subscribing to a podcast for the first time)
Next podcast is not chronological but instead jump to the older one that was already played, so have to manually start them
Resume playing fails most of the time and starts from beginning
Very jittery during playback, RSS clients pre-download the files w