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Insider January 12, 2023 — Spotify teases its next big event

Plus, more data on video podcasts, and a major label wants a major change.

Hey, everyone. Jake here today to, as always, write way too much about the tech side of things. In case you missed it, Ariel announced in Tuesday’s issue that Hot Pod Summit is coming back to Brooklyn in February as part of On Air Fest. This is going to be a fun one; we’re toying with the format to make it more interactive, which we’ll have more details on soon. Invites are going out now — if you didn’t get one and want to attend, you can submit your name here

Will we finally get Spotify HiFi?

Spotify announced this morning that it’ll be holding its next “Stream On” event on March 8th at 1PM ET / 10AM PT. The company plans to share updates on “creator tools, features, and programming” during the event.

This is Spotify’s second Stream On event, with the first being held in February 2021. Spotify used that event as a chance to lay out its business case for music and podcasting and make a bunch of announcements in both arenas. This was the event where Spotify announced its collab between President Obama and Bruce Springsteen, brought on David S. Goyer to talk about the development of Batman Unburied, and introduced the Spotify Audience Network, which let advertisers target Spotify originals and exclusives. It also announced that Spotify’s music platform would be expanding to more than 80 new markets. So some big, splashy announcements all around.

And wasn’t there one other big thing announced there? I’d swear there was something. Some exciting new feature? Did I imagine this?

Oh, right: Spotify HiFi, which was coming “later this year” back in 2021 and is yet to arrive or even really be acknowledged by Spotify since. The service was supposed to deliver “CD-quality, lossless” audio — a much-demanded feature by audiophiles — which is already available on competing services like Amazon Music, Tidal, and Apple Music. Apple even offers it at no additional charge above the standard subscription fee. (I’ll admit: I don’t think lossless audio makes nearly as much of a difference as a good pair of headphones or speakers, but I wouldn’t say no to higher-quality files, either.)

This year, Spotify stresses its focus will be on “new possibilities for creators to better connect with and build a powerful global audience across mediums.” That sounds to me like we’re probably talking about Anchor, video, and audiobooks — you know, Spotify’s big potential growth areas. Obviously, we’ll be tuned in and ready to catch y’all up on the news come March.

Speaking of video being important to podcast companies…

Morning Consult released the results of a new poll this week reiterating that, yup, a good contingent of podcast listeners enjoy having video, too. The big takeaway is that “nearly a third (32%) of Americans said they prefer listening to podcasts with video.” And why do people want video? Fifty percent of people said it “helps them to better focus on the podcast” — which reads to me like listeners are asking for ways to be more engaged with your content.

And add one more piece of evidence to the “YouTube is a podcasting giant” pile: the poll also found that “1 in 3 podcast listeners said YouTube is their most preferred podcast platform,” with Spotify and Apple picking up the next two spots.

These aren’t particularly new takeaways, but it’s another sign that the podcast–video divide / dispute / dilemma isn’t going away. Mostly, though, I read it as an opportunity: adding video to a podcast is much easier said than done, but it’s also a way to reach new audiences and operate on new platforms.

I’m sorry to out myself like this, but… I am very much among that video-loving group. I’m not a great multitasker, so when I’m tuned into something, I want to be tuned in — not cooking dinner or writing this column at the same time. And if I can well actually everyone for a moment: back in the early days of podcasting, video was very much part of the story. I’m thinking early Revision3 shows, like Diggnation or Totally Rad Show, which were as much low-budget web TV shows as they were pioneering podcast series.

Now, I think there’s a real question of how scrappy and low-budget you can get away with things looking in 2023 vs. back in 2005, but based on what I’ve seen on TikTok — tons of viral clips of people sitting in chairs, at desks, with microphones in front of their faces, mostly just re-reading r/AmItheAsshole entries and gasping every few lines — even basic video can go a long way in hooking viewers and reaching a new audience.

A new model for music royalties?

Lucian Grainge, CEO of Universal Music Group, wrote a memo to staff on Wednesday criticizing the way that streaming platforms like Spotify and Apple Music pay out royalties to artists. In the memo, which was leaked in full by Variety, Grainge writes that the “economic model for streaming needs to evolve.”

He goes on to describe what reads to me like the model that SoundCloud has (partially) switched to: where instead of pooling subscriber money into one big pot and paying it out to artists proportional to their listenership on the platform, money is allotted on a user-by-user basis. Right now, if you listen to a lot of Spoon and nothing else… too bad, your money is going to Taylor Swift since way more people are listening to Midnights. But under this altered model, all of your money would go to Spoon. (Or, at least, Spoon’s label and a bunch of other parties affiliated with the band.)

“Under the current model, the critical contributions of too many artists, as well as the engagement of too many fans, are undervalued,” Grainge writes. He says “we need” a new model that “supports all artists — DIY, indie and major … that values all subscribers and rewards the music they love.” He vaguely says they’re working on it “this year” alongside a whole bunch of other platitudes about how great artists are, so I’m not sure how seriously to take his timeline.

It does sound to me, though, like UMG is clearly interested in shifting the payout model next time it comes up for negotiation across platforms. That may help to appease artists, who have long complained about the small checks they get from Spotify, et al. (I’d point out, though: it’s UMG and the like who are making the deals to set those rates.)

But how will this benefit UMG? Grainge has an interesting tangent in his memo that I think may shed some light on that: he spends a while railing against, basically, “non-label” music taking up royalties. Here’s Grainge:

“Today, some platforms are adding 100,000 tracks per day. And with such a vast and unnavigable number of tracks flooding the platforms, consumers are increasingly being guided by algorithms to lower-quality functional content that in some cases can barely pass for ‘music.’”

Spicy! I don’t know that it means Grainge intends to do anything to put a stop to this behavior, but surely UMG and other labels will be keeping it in mind the next time their Spotify / Apple / Amazon / etc. negotiations come back up. It could mean demands for better placement on playlists or to isolate their artists from this kind of material. Or, it could just be that Grainge suspects a different royal allotment will work out better for the actual musicians with actual fanbases. It’s not a bad bet.

That’s all for today. Ariel will be back with you all tomorrow.