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Insider October 7, 2021 —Spotify wants you… for its ad marketplace

Plus, a look at Clubhouse’s Creator First contract

Happy Thursday, y’all. I personally have no sense of time because, as you know if you follow me on Twitter, I’ve been apartment hunting in Brooklyn, which is essentially like entering a black hole for weeks and coming out of it in a new apartment with no concept of where the closest grocery store might be. I can’t wait to exit the hole! I’m ready! 

I’m not abandoning you or the audio world, though, so let’s get to the news and scoops. Today, I’m going long on Spotify’s latest step in its quest for podcast ad domination, as well as an exclusive look at Clubhouse’s contract with its Creator First program participants and more!

Spotify beckons indie podcasters with the promise of $$ 

Another day, another set of Spotify stories. Yesterday, the company made a series of big ad-related announcements meant to bolster its ability to sell and serve ads for podcasters of all sizes. We have much to discuss.

There’s a lot, but let’s start with the meaty announcement: the one in which Spotify is allowing any Anchor podcaster to apply to be part of its Spotify Audience Network. Before I dive in, let’s cover our context bases. For the unfamiliar, SAN launched in April and serves as Spotify’s podcast ad network. It’s essentially a rebranded and built-out version of Megaphone’s ad marketplace that leverages Spotify’s data to target ads. This platform is the key to unlocking Spotify’s bigger podcast ambitions and also relates to its Anchor acquisition. Anchor’s bet has always been that it could help the little podcasters monetize. So long as they have some listeners, they could possibly have ads inserted, and, in the aggregate, these small podcasters create larger inventory to fill Spotify’s guaranteed ad impressions.

To accomplish this, Anchor first launched its Sponsorships feature. This was like a host-read ad sold at scale — podcasters would be matched with a brand, given copy to read, and the advertiser would reach their desired impressions through many small podcasts rather than a single massive one. However, reporting of mine from January found that Spotify itself was buoying the tool, spending tens of thousands of dollars on sponsorships for these smaller creators.

Anyway, fast forward to now, and Spotify is breaking its Anchor monetization options up into three tiers depending on a podcast’s size: Sponsorships (which have now been rebranded as Ambassador ads), participating in the SAN (this news from yesterday), and, for the top podcasts, direct connections made to advertisers through Spotify’s sales team. Spotify is not publicizing how big a show needs to be to become part of its ad network, nor is it sharing how big one needs to be to receive hands-on sales team support. (If you have an idea, let me know!) Spotify also says the CPM, which it’s calling RPM for Revenue Per Mille, is currently $13 for SAN-using Anchor podcasters, which is lower than Advertisecast’s estimate of an industry-wide $18 CPM average for 30-second ad spots. Spotify isn’t taking a cut of the revenue right now, a spokesperson says, without elaborating on whether or when it might start to do so.

For its part, Spotify says since launching SAN in April, “4X more advertisers are running ads,” and as of June 2021, “opted-in Megaphone podcast publishers have seen fill rates increase by over +10%, CPMs increase by over +40%, while the number of unique advertisers in their content is increasing, with some publishers seeing that number double.” Of course, percentage increases mean nothing without a baseline, which Spotify is unsurprisingly not providing. I expect Spotify will help decently sized shows monetize — other ad networks are doing that now — what I don’t know is whether it can pull off Anchor’s grand vision of allowing even tiny podcasters to participate in the podcast advertising world. 

Now real quick, I want to note the other news bits. Advertisers can now target by additional details, like topics of the content, and they can exclude their ads from “sensitive” topics, including podcast episodes about tobacco, weapons, and gambling. To save both myself and you time, the content targeting and sensitive topics implementation are both based on work from the Interactive Advertising Bureau, which is publicly available. I’m linking to it here. Interestingly, these features can happen now because Spotify is transcribing podcasts on its backend, allowing it to detect sensitive content on a per-episode basis, according to a spokesperson. (I wish these transcripts were public, but apparently not!) Podcasters won’t, at least right now, be told an episode is considered sensitive and, therefore, possibly not monetizable. They will be given the guidelines, however, so they should have an idea. 

And finally: US podcast ad buying will become partially self-serve. Another important asterisk to note about the self-service announcement: although advertisers can sign themselves up for Spotify’s ad portal and decide whether they want to advertise on the free music tier or in podcasts, they cannot supply the actual audio ad that runs in podcasts. Spotify will collaborate and make these ads for them, a spokesperson says. I don’t have a reason as to why this is the case, but I’m going to guess Spotify is being protective of the podcast ad space — it’s a new but critical business it wants to develop, so the bar is high for what people hear. A few bad ads could turn listeners off completely, as well as the hosts, especially given that these ads are inserted automatically without any sign-off from the podcasters.

So can Spotify build the YouTube of podcasting? I’m not seeing proof of that yet, but if any smaller podcasters want to tell me about how Anchor and SAN change their lives in the coming months, I’m all ears.

EXCLUSIVE: A look at Clubhouse’s creator contract

Last week, I published a story about Clubhouse’s Creator First program lacking brand sponsors. I’ve since gotten a look at the contract that creators need to sign to take part in the program, and today, I wanted to exclusively share some key clauses from the document. 

The clauses around derivative rights and what these creators own are especially interesting given the contentious debate around how much content a tech company owns when financing its creation. Here are some screenshots (of my re-typed copy of the contract). You’ll note that creators are given explicit ownership over their show.

Below is what rights Clubhouse specifically received, which includes being the exclusive social audio partner for any derivative works sold from the series. A spokesperson tells The Verge that these terms expired after the program, although the contract doesn’t explicitly state that. 

I call these contract clauses out because IP ownership has become something podcasters and digital creators of all sorts are specifically interested in negotiating. The big platforms, however, have less of an interest in ceding that ownership, given that IP deals are a substantial potential moneymaker. Spotify’s Gimlet and Ringer unions, for example, called out IP as an important point around which they wanted to advance conversations, but they didn’t gain any ground in the final contract. To Clubhouse’s credit, it’s at least telling these creators they can do what they wish with their IP — something that’s typically not provided to nascent audio makers who might not have the negotiating power, or resources, to demand it for themselves. 

I’m curious how all the various creator accelerator programs structure their deals, and for the folks in the crowd who might be thinking about signing up for these programs, this is your reminder to always have a lawyer review your contract!

Speaking of IP ownership, it seems like Luminary might be good about that given the below…

Guy Raz’s Luminary show goes wide

Guy Raz’s Luminary-exclusive show Wisdom From The Top is escaping the paywall. NPR and Luminary are partnering to not only release the show’s entire back catalog across podcast apps, but to also window new episodes as week-long Luminary exclusives  — taking a cue from the Amazon / SmartLess deal with similar terms. Episodes will be released weekly through 2021 and “throughout 2022.” This news follows Acast’s announcement last week that John Cameron Mitchell’s podcast musical Anthem: Homunculus will also be released widely. Huh, and all this after Luminary was listed as the second most popular Apple Podcasts subscription seller. Is Luminary alive? Dead? Recognizing maybe it can reap the benefits of exclusives with only a specific window of exclusivity?

The rumors are true: YouTube maybe cares about podcasting

I don’t know where I heard this first or who told who what, but congrats to all of you who knew Google’s podcasting efforts would coalesce around YouTube. Per Bloomberg: YouTube is looking to hire an executive to “oversee its podcasting business.” This person will be tasked with “organizing and managing the millions of podcasts that already exist on the site.” Sounds like a very chill, easily manageable job. But really, I’m curious where this person even begins. My guess? Advocate for an app redesign that lets people listen to audio with the screen locked for free. Oh, and try to win back Joe Rogan.

And finally…

Mark Cuban’s Fireside app officially launches

Fireside, the live audio app co-founded by Mark Cuban and Falon Fatemi, officially launched this week. The app had already been available to download on iOS for over a month, but I guess it’s no longer considered a beta. As a reminder, they’re partnering with Libsyn to distribute live shows as recorded, RSS-distributed podcasts, and per the release on this news, creators can simultaneously stream on Twitch, YouTube, and Facebook. They’ll also be able to sell tickets and “insert ads for podcast distribution.” It’s unclear whether this means creating tags for programmatic ad insertion or what. Fireside also says people will be able to make NFTs from their shows, which I can’t even begin to parse. There’s clearly a lot happening. Will Fireside defeat Clubhouse, Spotify, Twitter, Facebook, or any of the other platforms? Hmm… I’m not a betting woman, so I’ll, in this case, keep my thoughts to myself. 

Alright! That’s all. Thanks for bearing with me here, and I hope you enjoyed today’s Insider! As always, thanks for subscribing — your support means a lot. Feel free to let me know what you think or if there’s something I should pay attention to at ashley.carman@theverge.com. Adios!