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Issue 320, published October 5, 2021
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Hello again, welcome to the first week of October. I’m loving the spooky vibes and strong pumpkin energy the fall has wrought, although it was a little steamy here in NYC this past weekend. Summer’s last gasp. But I’m not complaining! I put the heat on in my car for approximately three minutes last week and was sad.

Enough about my SAD, though, and more on audio. In today’s newsletter we discuss the fan reaction to Spotify’s latest exclusive move, along with Patreon looking to make its own original podcasts, and more. Off we go.

Gimlet’s Heavyweight is becoming a Spotify exclusive, and the fans are mad

Heavyweight, one of the longest running Gimlet Media shows, is becoming a Spotify exclusive next month, five years after it began and two years after the Spotify / Gimlet acquisition. Host Jonathan Goldstein made the announcement (through a dynamically inserted ad for people listening outside the app) within the first couple minutes of the new season premiere.

“I get that when you find something working for you, you don’t want to rethink it,” he says. “But that said, I’ve also made the change over to Spotify, and it’s super intuitive, it's easy to use, and I really like it. So if you enjoy the show and you want to support us and the work that we do, I truly do hope that you’ll join us on Spotify.”

As is sometimes the story with these moves, the fans are upset, and perhaps because of the seemingly Very Online listenership for this specific show, they’re tweeting.

I’m including a couple tweets here, so you can gauge the reaction for yourselves, but broadly speaking, they aren’t so warm and fuzzy.



There’s plenty more — feel free to check them out here. I reached out to Spotify for clarification on why Heavyweight is going exclusive and what the goal is with this move, and a spokesperson referred me to this August blog post, which posits to offer an explanation but says basically nothing. The clearest sentence that could pass as an explanation is maybe this one: “We believe that streaming is the future of all audio listening and that our technology can provide the opportunity for the podcast ecosystem to grow, innovate, and ultimately create more opportunities for creators across the globe.”

Reading between the lines here: Spotify doesn’t want you to download episodes and therefore receive either baked-in podcast ads or dynamically inserted ones. Instead, it wants to own the entire advertising pipeline, which it can only do if you stream on Spotify. I assume you readers are familiar with its Streaming Ad Insertion tech, which you can read more about here, but essentially, it targets ads on the fly as individual listeners stream, and this ad targeting relies on Spotify data about listeners. Therefore, if you’re listening on Apple Podcasts or Pocket Casts or anywhere else, Spotify misses its opportunity to leverage the data it collects to not only serve better ads, but in the case of Gimlet shows, also sell more of them. Plus, you listening on Spotify means it also has a better chance of converting you into a paying subscriber, or at the very least, it begins your personal data trail.

The open question is whether angering some fans is worth the tradeoff, and for Spotify, the answer appears to be yes. I’m sure Heavyweight will lose some listenership — even Joe Rogan, who was never on the platform before going exclusive and thereby could have stood to gain some audience from his deal, might have lost a substantial chunk of his listenership. In this case, Spotify’s trading in some of Heavyweight’s listeners for the opportunity to make some cash. Unfortunate for those who don’t want to switch, but this is just how the industry operates right now.

Speaking of Spotify...

 
Learn more about RevenueStripe...

Twitch and Warner Music Group will launch exclusive music channels

This bit of news happened last week, but I wanted to be sure to mention it here. Warner Music Group and Twitch reached an agreement that’ll bring some of the music giant’s artists to Twitch through new channels, as well as exclusive original programming on the livestreaming platform. Per Oana Ruxandra, chief digital officer and EVP of business development at WMG, in the press release: “It’s clear that Twitch is an indispensable space for all types of creators to connect with their fan communities. Our partnership creates an on-ramp for artists to come onto the service with strong support from Twitch, opening up an entirely new source of incremental revenue.”

Of course, music is audio, but why do we care about this move here? Well, for one, multiple platforms see livestreaming audio as a business opportunity. Amazon itself is reportedly working on some sort of live audio product apart from Twitch, while Greenroom, Spotify’s live social audio app, was billed at launch as a place for musicians, podcasters, and creators more broadly to connect with fans for exclusive experiences. This Twitch deals trips up Spotify’s whole dream.

Not only does Twitch appeal to a much-desired demographic — young people — but it’s a massive, global platform. Much of this audio war is about being the main place people spend their time, whether it be listening to a podcast, having a conversation with a respected professional, or streaming music. Spotify could, of course, still have WMG musicians on Greenroom, which I assume will eventually be an in-app experience, but an exclusive content deal with Twitch doesn’t make that as easy.

I’ll also point out here just how essential it is that these platforms figure out monetization. Twitch creators sell subscriptions to their channels, collect tips, and distribute ads, of course while getting a cut of it all. Meanwhile, Spotify’s still figuring out how to help creators monetize at every level. It’s looking to sell more podcast ads for more people, and Greenroom appears to factor into this strategy, too. All of which is to say, I have a feeling Spotify wasn’t happy to see this deal announced, and I’ll be watching how it and other platforms react to the news.

Of course, when we’re talking about the creator economy we have to mention Patreon, and it also has a bit of news this week.

Patreon seeks original podcasting content

Bloomberg reported late last week that Patreon, which has historically allowed creators to sell subscriptions to their work, is apparently now looking to finance its own original content. The strategy appears to be windowing the content for an exclusive period of time to Patreon itself. Now, unfortunately, this is all we have in the way of details, so I’ll leave this one short and hope we hear more in the coming weeks.

I got a few more short ones and then we’ll wrap up!

NPR workers negotiate a new contract

NPR staffers have ratified a new collective bargaining agreement with the company. The union tweeted the highlights, but among them are the guarantee that NPR will advertise the salary for in-union jobs on listings; increased salary minimums; and an agreement to improve its policies when it comes to addressing online harassment. I look forward to seeing the full contract! I imagine it’ll serve as a reference point for future podcast / audio unions’ negotiations.

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The Athletic has been burning through cash

We’ve been tracking The Athletic here at Hot Pod given its ambitious podcast strategy that involves multiple localized and national shows. According to The Information yesterday, however, the company burned through $95 million between 2019 and 2020. This, the publication says, surpassed its $73 million in revenue during that time period. It apparently has enough cash to cover its costs for the next eight months, which could explain why it’s been trying to find an acquirer at a price of more than $750 million. Best of luck, and I hope these podcasters land on their feet.

Now, finally, I don’t typically cover content deals but sometimes the extraordinary happens...

Lindsay Lohan is becoming a podcaster

The early aughts are back, and apparently, it comes with a podcasting twist. First, Paris Hilton invested in the unfortunately named Podz, which sold to Spotify, and now, here comes Lindsay Lohan with a Studio71-made podcast. The unnamed show will be released in late 2021 or early 2022, and Studio71 says it’ll be the place she shares her “authentic voice” while listeners will “get a chance to experience a never-before-seen side of the megastar.” I thought I heard her authentic voice on Speak, her debut album, but I suppose I can accept a podcast, too.

Alright, a bit of a long one today, but I’ll be back on Thursday for our paying subscribers. As always, if you’d like to keep up with all the audio and podcasting news, scoops, and analysis, click here. See you soon!

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