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Insider March 25, 2022 — Spotify everywhere you look

I’m looking for excuses to write about the EU’s Digital Markets Act

It’s one of those days again. You know, when the gravitational pull of big tech induces half an issue to be about Spotify. No complaints here — all I want to do this morning is read about the European Union’s new digital market regulations… maybe I can find an excuse to slip that in below.

It’s Spotify Spotifriday

I promise to never use that phrasing again… but we’ve got three items from Spotify to run through today:

1. Spotify will get to use its own payment system on Android as part of a new agreement with Google. This is potentially a big deal, with a heavy emphasis on potentially.

Spotify has, for years, complained loudly to anyone who will listen about the unfair dynamics inside mobile app stores. Apple and Google both require apps to exclusively use their own payment mechanisms, which usually means routing 15 to 30 percent of all money brought in back to those companies. App store rules generally prevent companies from advertising that they might offer cheaper prices online, where they don’t have to deal with these — frankly outrageous — added fees.

Several regulatory crackdowns later, Google is now exploring opening up the option for apps to use their own payments systems, and Spotify is its first partner. This is great news for Spotify: it can directly own the billing relationship and, more importantly, keep a bigger chunk of the revenue from users who sign up on mobile.

But here’s where that potentially comes in. Google can and will still take a cut of sales since this is all still happening on its platform — and as of right now, we don’t know how much it’s taking in fees. We’ve seen both Apple and Google try to skirt the spirit of regulations around this in other countries by putting alternate fees on apps that use their own payment systems running as high as 27 percent. If that’s happening here, too, well, I’m not really sure I see the point.

This option will, presumably, be made available to other apps in the future. In general, anything that means more money going to the actual content creators seems like good news.

1(b). I’ve got a related item to explore here — and here’s where my interest in the EU’s Digital Markets Act comes in: the European Union is close to approving a sweeping set of tech regulations that would apply to major platform operators like Facebook, Apple, and Google. There’s a whole bunch of interesting stuff in there about messaging apps, ad targeting, and so on.

Relevant to this discussion is that among those regulations are rules that would require platforms to be open to alternative ways of installing apps — aka, potentially rival app stores or being able to download and install an app from the web, like you can on a desktop computer. That could provide a lot more leverage to Spotify or any other company that wants to avoid these gargantuan platform fees. The details are slim for now, but two of my colleagues over in the UK, Jon Porter and James Vincent, have more on what we know so far. Alright, back to Spotify.

2. Ashley reported in Bloomberg this week that Spotify is planning to bring live audio inside its main app. The company currently operates live audio inside a separate app, Greenroom, which I’m going to take a guess and say is not doing super well on its own. The app metrics platform SensorTower pegs Greenroom as currently sitting in 449th place on the iOS app store charts for “free social networking apps.” Clubhouse is in the news category at number 7.

I’m not convinced that a change in location will instantly revive Spotify’s efforts in what already seems to be a potentially flagging medium. But who knows? Spotify is more of a destination for audio than Twitter is. And like podcasts, the company has an incentive to get people to tune into audio that it isn’t paying royalties on.

3. For the second year in a row, Spotify released figures breaking down how much money musicians earn through its platform. This has obviously been a major point of contention between Spotify and musicians, and I think the numbers pretty clearly speak to why. Here’s what I found most interesting from my colleague Chaim Gartenberg’s write-up of the news:

According to Spotify, there are over 8 million artists on its platform, of which about 2.6 million have uploaded at least 10 songs. And of those 2.6 million artists, only 165,000 of them averaging at least 10,000 streams a month — compared to the 52,600 artists that Spotify says made at least $10,000 through its platform last year, a gulf that speaks to the spectrum of success on the platform.

The takeaway: a fairly small subset of all Spotify musicians have a sizeable audience on the platform, and of that subset, only a third, at most, are making at least $10,000 per year through Spotify streams.

I think the tension between Spotify and musicians is more complicated than a lot of the messaging lets on. I.e., Spotify says music labels brought in around $4 billion from its streams last year, so someone is making money off all this. But that’s not exactly comforting to the musicians protesting over low rates.

OK, congrats, we’ve made it through The Spotify Zone.

Overcast gets its “largest redesign” yet

If any of you are Overcast users, time to check for an update. The app got a big redesign this morning that makes the interface look a little more spacious, modern, and colorful. There’s also a new theming system that’ll let you change the app’s primary color, and you can even set a different look for light and dark mode. My colleague Mitchell Clark has more on the changes.

Pineapple Street Studios + Amazon go semi-exclusive

Pineapple Street Studios announced a deal with Amazon this week to co-produce “at least” four new shows with Amazon Music and Wondery. Those networks will get an “exclusive distribution window” before they’re distributed widely on other platforms, according to The Hollywood Reporter. The exact length may differ for each show.

What I think is most interesting here is something that’s not in the announcement: an ad sales arrangement. Amazon’s big exclusivity deals have been more focused on selling ads than getting people to use its platforms. But it’s not clear to me that’s what’s happening here. I’ve reached out to Pineapple Street Studios for more information.

Of course, it could just be that Amazon wants some great new shows… Pineapple Street did just win podcast of the year at the Ambie Awards for 9/12.

Apple spills some secrets behind its podcast charts

Apple has a new page up offering a bit of detail into how its podcast rankings work. I don’t think there are any surprises here — it’s a combination of listeners, follows, and completion rate — and Apple said it doesn’t want to go into too much detail to “protect [the charts’] integrity.”

What Apple does elaborate on is what isn’t factored into the charts. The charts don’t “reflect all-time listening records,” and “ratings, reviews, and shares” aren’t factored in either.

I think a basic read of this is: Apple seems to weigh the charts toward shows that are getting a lot of attention now, in terms of people actually listening and showing that they want to keep following along.

MOVES

Eric Barnett is heading to Supporting Cast as director of sales and marketing. He was previously at Findaway — the audiobook company recently acquired by Spotify — for close to eight years, most recently as manager of strategic partnerships.

Paola Mardo is joining Proximity Media — the Ryan Coogler co-founded production company — as its head of audio. Mardo joins from Pushkin, where she was executive producer over the Apple Fitness Plus series Time to Walk. At Proximity, she’ll be building out an audio team to make original shows as well as podcasts that supplement the network’s films and TV shows.

That’s it for this week. Aria will be with you on Tuesday!