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Insider: April 1, 2021 — The Club is Packed, Libsyn acquires ad marketplace, Revolving Door

The Club is Packed. Clubhouse’s central conundrum was apparent to me the very second I dipped my toe in the water: What is Clubhouse supposed to be? And what will it become when everyone tries to crowd into its lane?

From my column in February:

The difficulty of answering this question stems from the fact that Clubhouse is still at a point in its pre-revenue life cycle where its internal universe is filled with abundant potential futures, operationally capable of accommodating a variety of different metaphors about its product experience and its theoretical place in the market…

… the future of Clubhouse specifically is unclear to me, but the future of the “live group audio” format is slightly less so. It’s fairly easy to imagine a future in which competing entities move to claim any of the metaphors left aside by Clubhouse, and a kind of Great Sorting begins: the virtual conference angle claimed by LinkedIn or Microsoft, for example; the virtual live events idea by Patreon or, oh I don’t know, The Knitting Factory; next-generation call-in radio shows by Spotify or Pandora or Apple Podcasts; virtual sports watch parties by ESPN; and so on.

In that imagined future, what will Clubhouse look like when all that sorting is done?

Well, we’re going to find out. Clubhouse’s competitive context changed dramatically over the past week or so, as various social media giants went public with their respective intents to push hard into the social audio lane. (Or “live group audio” lane. C’mon fellas, I’m trying to make fetch happen here.)

To wit:

  • Spotify has acquired Betty Labs, creator of the sports-centric Locker Room, which it plans to expand beyond that category and more deeply tailor to its creator constituencies.

  • LinkedIn confirmed that it’s working on a Clubhouse alternative, which will presumably steer into the use-cases where Clubhouse feels like a professional conference. Here’s the TechCrunch write-up on that.

  • Slack announced that it’s building social audio features into its platform, meant to facilitate impromptu social experiences you’d typically find in the physical workspace. (As a person who is a very bad employee in part because I enjoyed rolling over to the next cubicle for potent gossip, this hits.) Interestingly enough, Slack CEO Stewart Butterfield made this announcement on Clubhouse, which, c’mon, that’s fucking hilarious. Here’s the Protocol write-up.

  • Discord, the voice-centric digital messaging platform chiefly oriented towards gamers, rolled out a Clubhouse-like feature earlier this week. Which is interesting in part because a common lament about Clubhouse is that Discord was doing that Clubhouse did before Clubhouse ever Clubhoused. Here’s The Verge on that.

  • Don’t forget: all this is happening as there are a few alternatives/competitors already in the public eye, in particular Twitter Spaces and whatever Mark Cuban’s working on.

  • I’m pretty sure I missed someone.

As I look at the spread that’s unfolding here — and the many different potential futures that’s being claimed away from Clubhouse — my original set of questions comes back to mind: What is that app supposed to be now? Who is it now for? How does that company understand its identity, community, and path forward?

A few thoughts:

  • I think the contrarian take here is that this situation might be a good thing for the company, as increased competition puts the pressure on the Clubhouse team to pick a few lanes and focus, maybe find real fundamentals away from the hype, the buzz, and the identity inflation afforded by the many VC and tech types who were smitten with it.

  • It seems to me that the major choice Clubhouse has to make is whether it’s more of a peer-to-peer or a creator-to-audience platform. No one external user can see the full scope of any digital platform, so obviously my view is limited, but my sense using the app is that the majority of its usage is on a peer-to-peer basis while it drives significant attention with stuff that happens on the latter dimension.

  • If Clubhouse does choose to lean into the creator-to-audience construct, it’s going to have to start building analytics, monetization, and audience development tools to that effect, which it does not have right now. More importantly, it’s also going to have to be focused on what kinds of creator classes it wants to privilege and serve. Relevant to this is the Creator Accelerator program it launched last month, which used language suggesting the platform’s proclivities towards a creator-to-audience mindset. The kinds of people, creators, and shows they choose to support in its inaugural class is going to be a really interesting signal to watch.

  • Also, if they do choose to lean hard into the creator-to-audience construct, the direct competitor is going to be Spotify. (And Mark Cuban’s company, maybe?)

Speaking of Spotify, shout-out to folks who were like, “So, live radio?” Because while I don’t think this is entirely right, it’s not entirely wrong either. My sense of what Spotify is going to do with Locker Room isn’t necessarily meant to recreate live streaming digital audio experiences we’re familiar with today — e.g. clicking on the Play button on the Boise State Public Radio website, or pulling ESPN Radio streams on my web browser — but rather, it feels like the interest to create features for experiences that (a) can be eventized and (b) potentially evokes the type of engagement you’d expect on Twitch.

It’s a different kind of media experience, but at the end of the day, whatever Spotify’s going to do there is going to swerve the company more deeply into traditional radio’s lane. I would not underestimate this dynamic.

Another thing to watch: how the music labels are feeling about this.

Extra reading on Clubhouse… Casey Newton, friend of the newsletter and the writer of Platformer, has two interesting things on this. Firstly, he argued earlier this week that the fate of Clubhouse rests on an Android rollout, and secondly, he pulled data on Clubhouse downloads from Sensor Tower and found that the app saw a 73% decline in installs between February and March.Libsyn raises $25 million in new funds, acquires AdvertiseCast for $30 million. Libsyn, of course, is one of the oldest podcast hosting and distribution platforms in the business, while AdvertiseCast is a podcast advertising marketplace platform founded back in 2016 that strikes me as being in the same competitive set as Podcorn, which was acquired by Audacy (née Entercom) for $22.5 million in March.

Indeed, you could probably apply the same reading as the Audacy-Podcorn situation to this deal: this move basically sees Libsyn further buying its way to the modern on-demand audio table, which is increasingly being defined by the likes of Spotify and iHeartMedia. Also germane: two months after Libsyn announced its acquisition of Auxbus, a podcast creation platform.

Anyway, what’s significantly interesting about this AdvertiseCast acquisition is the amount of financial detail in the press release.

Here are the eye-catching chunks:

AdvertiseCast’s self-serve marketplace enables podcast advertising for over 1,500 active mid- and large-tier podcasters currently on its network and allows advertisers and agencies to efficiently buy and manage advertising campaigns in the podcast sector. Since inception, AdvertiseCast revenue has grown rapidly, increasing 45% year over year in 2020 to approximately $12 million. AdvertiseCast has scaled profitably since inception with no outside investment…

… Under the terms of the purchase agreement, Libsyn will acquire all of the issued and outstanding membership interests of AdvertiseCast in consideration for a purchase price of up to $30 million, of which $18 million will be in cash, $10 million will be in newly issued Libsyn shares, and $2 million will be in the form of an earn-out, which is subject to the terms and conditions of the purchase agreement. Co-Founders Trevr Smithlin and Dave Hanley will remain with the company and enter into employment agreements as a condition to closing.

Meanwhile, Libsyn’s new $25 million fundraise comes through a privately placed equity transaction, which is a financing mechanism that allows a publicly traded company — it’s listed on OTC Markets — to quickly raise money from a private group of investors without having to go through the SEC. The fundraise was led by existing shareholder Camac Partners and new shareholder Hudson Executive Capital LP, plus a few others that weren’t listed in the release, and that money will go towards the AdvertiseCast acquisition as well as “other strategic acquisitions.”

Anyway, I think Libsyn is due to report full-year 2020 performance shortly…This should be useful for news producers to note… In my inbox:

Reuters Audio is now available on the Reuters Connect Marketplace, offering more flexible access to its library of over 600,000 pieces of audio content…

… In the coming weeks, Reuters will enable the use of audio content from multiple Reuters Connect news partners. From local news agencies like EFE and Latin America News Agency to networks including CNBC and PBS to UGC outlets including Storyful and ViralHog, Reuters Connect users will have access to a range of audio content to expand and engage their audiences.

You can find more information about Reuters Audio in this corporate blog post that was published when the product was first rolled out last summer.Revolving Door.

  • Southern California Public Radio has hired Antonia Cereijido as executive producer of LAist Studios, its podcast division. (Disclaimer, as usual: I used to host an LAist Studios podcast, which of course ended earlier this month.) Cereijido was previously a senior producer at Futuro Studios, where she most recently hosted and produced Norco 80 through a collaboration with LAist Studios. Her appointment comes alongside another personnel shift at SCPR: Tony Marcano was also announced to have been promoted to managing editor of the station’s newsroom.

Got a new job? Tell me — would love to Let The People Know.