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2019 in Review: Brave New World

In the past, writing these year-end columns can be a little tough, as it often requires some effort to string together disparate threads into a coherent master narrative that captures the previous twelve months. But the master story of podcasting in 2019 couldn’t be clearer: there was Spotify, and there were the ripple effects of Spotify.

Let’s dispense with the exposition, already much-trodden. The year began with Spotify whipping out around $400 million to acquire three podcast companies: Gimlet Media, Parcast, and Anchor. The move was tantamount to a big ol’ cannonball into a pool where the company had previously only dipped its toes. These massive acquisitions, we’re told, make up the opening gambit of a new ambition: to becoming something much more than a music streaming service.

So that’s how the year began — with an explosion. Meanwhile, the year ends on steady drum beats, with Spotify firmly at the center of the story about podcasting and where it’s supposed to go. Some of this is just good brand management. Having secured an exclusive audio development deal with the Obamas, a cover story in The Hollywood Reporter, and quite a bit more in between, the company has launched a fairly effective campaign to reframe its identity in the eyes of the broader media, entertainment, technology, and finance industries. Where it was once a digital music distribution company whose value was almost completely defined by its complicated relationship to the music labels, Spotify is now an all-consuming audio platform that might just outflank its old frenemies.

But there is also some substance to the brand weaving. Over the course of the year, there’s been some indication that the company has been able to do exactly what it has said it wants to do: to bring the full weight of its resources and capabilities to bear on podcasting. The past month alone has seen steady rollout of new features meant to improve podcast discovery on the platform. Those releases come on top of Spotify intimating that it has, indeed, seen meaningful growth in podcast listening on its platform. From the company’s third quarter earnings report: “We continue to see exponential growth in podcast hours streamed (up approximately 39% Q/Q) and early indications that podcast engagement is driving a virtuous cycle of increased overall engagement and significantly increased conversion of free to paid users.”

Between Spotify’s clear declarations of its goals and various data points suggesting that it’s had a good start towards those goals, we can unambiguously say that the company’s re-entry into the non-music audio scene has been one of the most consequential developments in podcasting since Serial. And despite all that has already happened, between the money spent and the company’s overt articulation of its strategy and tactics, there remains a looming sense that we’ve only seen a glimpse of what’s to come.

Another thing that has only been revealed as a glimpse: the full ripple effects of Spotify’s big year throughout the rest of the podcast ecosystem. I’m sure there are hundreds of ramifications to parse through, but for the purposes of this column, I’m just going to narrow things down to the three big pieces that are the most impactful in my eyes.

The first has to do with the perception of podcasting’s value by everyone outside of it. By spending a sum of money larger than the GDP of Tonga on podcast acquisitions, Spotify has raised the perceived level of podcasting’s potential value up several notches, cultivating an elevated sense of competition and momentum in an industry that had, up to this point, largely adhered to a slow, steady, and somewhat unsexy growth trajectory. There may be circular dynamics at play here: Spotify’s expensive acquisitions were essentially a bullhorn pointed in the direction of everyone else — yelling “We believe there’s a crap ton of value in these here hills, enough that we’re going to spend a crap ton of money to get it!” — that will draw more value-seeking entities (advertisers, talent, non-audio media companies, investors, etc.) into the ecosystem whose very participation, in turn, could possibly create additional value for the industry as a whole. It is the case, of course, that podcasting was already creating considerable value and attracting new value-seeking entities by itself and on its own terms. Spotify, then, has become a kind of accelerant, meaning to push that process down the road more quickly, but with the intent of assuming some baseline control of the value creation.

The second effect has to do with the relationship between podcasting and Hollywood. That relationship had already been solidified well before this year, with talent agencies steadily increasing their involvement in the space. That involvement plays out in both directions: you have talent agencies greasing the pipelines for podcasters to jump into other media, and you have them greasing the pipelines for talents from other media to jump into podcasting.

Again, Spotify likely serves as an accelerant here. One of the company’s strategic pillars around podcasting involves developing original and exclusive programming, and a good deal of those efforts have had a distinctly Hollywood-centric emphasis. (Not for nothing, the company’s appearance in a Hollywood Reporter cover story should tell you something about the constituency they’re trying to court.) The fact that Spotify will probably serve as a major buyer of podcast projects will increase the incentive for broader entertainment companies to devote more attention and resources to the categories. The big question that falls from this, then, will be about the proportional beneficiaries of the upside: will the bulk of the newly created value go to native audio talent, or talent that already have ample opportunities in other media? How fluid can it really get between those two talent buckets? (We explored this in a column last month, by the way.)

The third ripple effect has to do with Apple. Yep, took me over a thousand words to get to my first mention of Apple in this year-end column, and that’s kind of the point. By doing what it did, Spotify has fundamentally redefined the story we’ve been telling all this time. I think it’s safe to say that podcasting, once a community that owes its health to Apple’s impartial stewardship, is now distinctly a two-horse race. (Or, depending on your disposition, a community stuck between a rock and a hard place.)

Despite everything, it’s remarkable (yet, weirdly, still unsurprising) that we haven’t seen any overt or direct response from Apple with regards to the increased Swedish competition over podcast listening. There is, of course, the Bloomberg report from the summer stating that Apple has begun meeting with various podcast publishers to discuss exclusive content deals, which I have consistently been told is something that is indeed happening, but I’m still struck by a lack of… oh I don’t know, hunger.

I’m going to hold my position on this until we get to see the full shape of whatever Apple Podcast’s official next move is supposed to be. If the Bloomberg report is right (again, I haven’t been told otherwise), what kinds of publishers are they approaching? What is the driving strategy? How will it differentiate Apple’s new podcast order from the podcast world Spotify wants to build? More to the point, what will Apple stand for? To state the blindingly banal Silicon Valley truism: execution matters, and there are more than a few ways that a potential Apple Originals/Exclusives strategy could succeed and fail.

Not that the prospect of Apple matching Spotify pound for pound with an exclusives/originals strategy is something that should be universally embraced, of course. There are more than a few podcast folk who feel weary about a Balkanized future, given podcasting’s historical relationship with openness. I am one such weary-wort. For what it’s worth, I subscribe to the perspective that Apple doesn’t have to match Spotify pound for pound in order to preserve its influence over the space. (To the extent that it wants to, which, frankly, still strikes me as an open question.) Apple can, and should, match Spotify on other stuff — like being accessible on smart speakers or, you know, improving on its horrendous app — but I do sincerely believe there is a future where Apple can maintain its commitment to the open ecosystem and hold the line against Spotify.

However things shake out, I’m afraid to say it seems that the road ahead will be a rocky one for independents. The year ahead is rich with unknowns, but the one thing we do know is that there will be more money and corporate-owned entities flowing into the ecosystem, which will translate to more competition and almost certainly a more difficult operating environment for podcasters who’d rather not align with anybody right out of the gate.

On the flip side, my sense is that Spotify truly believes that it will have positive impacts on both big publishers and independent podcasters, the idea being that the company’s various exclusive programs are meant to get its users through the podcasting door after which they can discover the wider universe of shows, from big and small providers, via the numerous recommendation features that will be thrown their way. And sure, there remains the possibility that Apple will, indeed, muster up the interest to double down on open podcasting, consciously facilitate a space where big publishers and independents can exist on equal footing.

But if I was a podcaster intent on preserving independent self-ownership, I don’t think I’d be confident enough to bet on either of those outcomes. There’s just too much power in caprice. I’d probably be better off betting on myself, which would mean betting on various tools, partners, and philosophies that could help me bet on myself, whether it’s an alternative/non-advertising business model (Patreon, Supporting Cast, etc. etc.) or an operating ideology that focuses on being small and niche.

I’d be remiss if this column sound purely skeptical about the way things are going, because that wouldn’t be entirely accurate. I’m not that much of an ideologue to dismiss the upsides of the changes we’ve seen over the past year or so, whether it’s the fact there’s more money now that can potentially be spent on producers and native talent, or whether it’s the fact that the growing participation of older media companies in the space means more stable jobs for those who’d rather not live with the instabilities of running your own shop. But I still burn the candle for indie podcasts and media, because independence is one of podcasting’s original promises.

For what it’s worth, I’m still the type of idealistic dolt that believes the trend towards a certain kind of big-ness — accelerated by Spotify, deepened by corporate interest, potentially tempered by a matching Apple response — opens up a gap that can be filled by non-profit entities, in particular the public media system. As it stands, there’s a slice of public radio that’s responded to the podcast boom by building analogous businesses able to tap into the financial value that’s being created here. (Quick reminder that NPR’s podcast sponsorship revenue is projected to beat broadcast sponsorship next year.) But there’s an opportunity for the public radio system as a whole to fashion itself as the home, and advocate, for independent and open podcasting. This would be a public media system that sees itself only partly as a content publisher, and more holistically as the facilitator of a wider system of publishing.

That’s all pie in the sky stuff for now. I bring up that possibility, though, to raise a broader point: Spotify may be at the center of the podcasting narrative right now, but it isn’t the whole story. That’s still being written.